UK regulator raises energy price cap by 80%

MADRID, 26 Ago. (EUROPA PRESS) -

The UK Office for Gas and Electricity Markets (Ofgem) has announced that the energy price cap on British household bills will be £3,549 (€4,205) per year, which It represents an increase of 80% compared to the current limit of 1,971 pounds (2,335 euros) and 178% compared to the limit of 1,277 pounds (1,513 euros) of October 2021.

The new tariff cap in the United Kingdom, which will come into force as of October 1, reflects the continuous increase in wholesale gas prices worldwide, whose rise began to coincide with the lifting of restrictions due to the Covid-19 pandemic. 19 and that has increased to record levels due to the cut in supplies from Russia, the regulator explained.

The price cap sets a maximum unit price for energy that reflects the cost of buying it on the wholesale market and supplying it to households. Likewise, it also establishes a strict benefit rate for suppliers for the commercialization of domestic energy.

In this regard, Ofgem has underlined that the maximum price cannot be set below the actual cost of buying and supplying energy to our homes and therefore rising energy costs are reflected in it.

"We know the massive impact this price cap increase will have on households in Britain and the difficult choices consumers will now have to make," said Jonathan Brearley, director of Ofgem, who has attributed the spike in prices to record levels. to the aggressive economic act of the Russian state in cutting off gas supplies to Europe.

"The government support package is providing help at the moment, but it is clear that the new prime minister will need to do more to address the impact of the price increases that will come in October and next year," he added, stressing that it will be necessary to act urgently

The British regulator will review the energy price cap again in January 2023 and, despite not offering maximum price projections due to the high volatility of the markets, it has warned that "prices could worsen significantly until 2023".

In this sense, the consulting firm Cornwall Insight anticipates that the new price limit could be raised for the first quarter of next year to 4,649 pounds (5,508 euros) and reach 5,341 pounds (6,327 euros) in the second quarter of 2023 from where would moderate to 4,767 pounds (5,647 euros) in the third quarter.

The annual rate of inflation in the United Kingdom stood at 10.1% last July, compared to 9.4% registered in June, which represents the largest increase in prices since 1982.

The Bank of England had warned that the rise in the CPI may exceed 13% in the fourth quarter of 2022 and remain at very high levels for much of 2023, after the revision of the energy price ceiling in October.