LONDON - Households in the United Kingdom are facing the biggest spike in energy bills for the summer in four years. From July 1, the gas and electricity tariff cap rises by 13 percent.
The Guardian, quoted on Monday, June 29, reported that the energy tariff cap set by regulator Ofgem rose to the equivalent of £1,862 per year for the average household. This tariff cap is the maximum benchmark for the cost of energy that suppliers can charge consumers.
The increase comes as the UK's household energy debt has hit a record high. Ofgem data shows that energy bill arrears have risen by £240 million in the last three months to almost £4.8 billion.
Political pressure is also increasing. Ministers are urged to keep energy costs down, especially ahead of winter. Andy Burnham, who is said to be a contender to be the next prime minister, is expected to face immediate demands to deal with the high cost of household bills.
Finance Minister Rachel Reeves has previously refused to repeat universal energy assistance as the Liz Truss government provided in 2022.
James Mabey, policy analyst at National Energy Action, said energy debt is leaving many homes cold, anxiety is rising, and families are being forced to choose between basic needs.
"The right response is to expand debt cancellation," Mabey said, as quoted by The Guardian.
The increase in bills was also triggered by a surge in wholesale energy prices due to the war in Iran, which has disrupted oil and gas shipments through the Strait of Hormuz for the past four months.
Until now, the quarterly tariff limit has held back some of the impact of the crisis from consumers. However, starting July 1, the increase in wholesale prices began to enter household bills and is expected to remain high until the next adjustment at the beginning of October.
Nigel Pocklington, CEO of Good Energy, quoted by The Guardian, said that the increase in bills had become a financial nightmare for millions of households in the UK. Many residents, he said, are not even able to pay the bills now, let alone when costs go back up.
Good Energy proposes that the cost of government energy policy is no longer charged through electricity and gas bills, but transferred to general taxation. The company is also pushing for an increase in the Warm Home Discount allowance by £300 to £450 for 6 million vulnerable households.
According to Good Energy, the scheme will cost the country around £10.1 billion. But the average household could save £76 a year, while vulnerable groups could save £376.
Good Energy also supports breaking the link between electricity prices and gas plants. In the proposal, gas plants are placed as strategic reserves and are only used as a last resort with a fixed tariff.
Greenpeace and Stonehaven's analysis said the move could save households up to £60 a year and could be implemented in two years.
A spokesman for the British government said energy costs had been cut by 150 pounds sterling for the next few years. The government is also expanding the Warm Home Discount for around 6 million households.
The government has stated that it will move faster to use domestic energy, including reducing the influence of gas prices on electricity prices so that households are better protected from energy crises.
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