BRITAIN ANNOUNCES 80% INCREASE IN ENERGY PRICES

  • 27/08/2022

Britain announced that it will raise the ceiling on energy prices in the United Kingdom by 80% from October, which will lead to an increase in inflation amid the cost of living crisis, and pressure on the government to act.

Given the current situation, the Office of Gas and Electricity Markets (OfGEM), the British energy regulator, warned Friday that "prices could worsen significantly throughout 2023", calling on the government to provide "urgent" aid at the height of the cost of living crisis.

The price ceiling was raised from 1971 pounds per year for an average family to 3,549 pounds due to the rise in international gas prices, especially since the war in Ukraine.

"The rise reflects the continued increase in global wholesale prices for gas that began with the shutdowns due to Covid-19 and was pushed to record levels when Russia slowly cut off gas supplies to Europe," the same source said.

Since this threshold was calculated on the basis of the average wholesale prices of gas during the previous months, experts expect it to rise to more than 4,000 pounds in January and up to 6,000 pounds in the spring, according to the most pessimistic estimates, which will lead to an increase in inflation to exceed 10% on an annual basis. in Britain.

Ofgame chief executive Jonathan Brierley said the agency "recognizes the huge impact this price cap hike will have on families across Britain and the difficult decisions consumers will have to make".

The authority explained that this maximum provides a "modest" profit for energy suppliers from energy sales to households, but "unlike energy producers, most distributors are not making a profit at the moment."

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