How much will the cost of gas and electricity in the UK increase in the coming months?
With rising British gas and electricity costs, what do economic analysts predict?
What has the UK government done to help the British with the rising cost of living?
What are the forecasts for gas production in the UK in the coming years?
Rising global gas prices and the energy crisis in Europe are increasing heating and electricity costs by 54% for many British households. The government’s energy regulator, Ofgem, has announced that the cost of heating and electricity for many British homes will increase by 54% in April. The sharp rise results from rising global natural gas prices and is expected to exacerbate concerns about inflation and the cost of living for the British.
Rising energy costs 22 million British
For customers whose energy bills are deducted directly from their bank account, the annual energy cost has risen by 693 pounds ($940), to £1,971, Ofgem said. This sharp increase will affect about 22 million British consumers. It assesses the energy market twice a year. It allows energy suppliers to pass on costs such as rising gas prices, the primary source of electricity generation in the UK, to consumers. “We know this rise will be extremely worrying for many people, especially those who are struggling to make ends meet,” said Jonathan Brearley, Ofgem’s chief executive, in a statement.
UK government aid to energy consumers
Rising energy prices have become a major political issue in many countries, including Europe, and governments are trying to contain the situation and prevent harm to the people who are their voters. Rising energy prices are also a threat to reducing carbon emissions globally. The high price of natural gas has also led to the bankruptcy of many utility companies. According to Ofgem, 29 companies with 4.3 million customers have gone bankrupt or left the market over the past year. The UK government announced immediately after £9.1 billion would be allocated to help consumers pay for energy bills.
The rising cost of living in the UK
The cost of living in the UK has risen even more as the energy bill has been raised by more than 50%. Ofgem has expanded its energy bill in the UK by an average of £1,915 a year, with more than a 50% increase in its energy bill ceiling since April, British media reported. The Bank of England will soon raise its bank interest rate from 0.25% to 0.5%, as forecasts show inflation will likely remain high through the spring.
The cost of living is the most critical concern of families
The people of this country used to face difficulties in meeting the cost of living due to rising living costs and rising water, electricity, gas and telephone bills. Now, the increase in taxes and energy prices will be further exacerbated. With energy prices rising since the beginning of February this year, a quarter of the country’s 22 million households are in crisis. According to a Deltapoll survey, the cost of living is now a significant concern for the British people, overtaking coronavirus for the first time since the pandemic.
Impossibility to provide living expenses for the British
According to the poll, 83% of Britons said their main concern was rising living costs. 9% said they were currently facing “extreme financial difficulties” and could not afford to rent, buy food or repay loans. A quarter said they would be in an unbearable situation as energy prices rose to £30 a month. And more than half of people said that if £50 per month are added to their energy costs, they will not afford it.
75% reduction in British gas production by 2030
The offshore energy industry body OGUK said the lack of investment to build new gas fields in the North Sea would increase the country’s vulnerability to geopolitical crises such as the recent tensions between Russia and Ukraine and rising energy prices.
If new oil and gas fields are not developed in the UK, the country will become increasingly vulnerable to price shocks and geopolitical events, and its gas production will be reduced by 75% by 2030. A further increase in gas prices will exacerbate the current energy crisis in the UK. Gas and electricity suppliers in the UK will go bankrupt, and consumers will face rising living costs due to rising energy bills from 1 April. Conditions in April will be even worse for consumers.
Increasing British poverty by rising energy costs
Millions of British families are falling into energy poverty, and many have to choose between the cost of food and heating. 47% of British gas needs are currently met by domestic production. 31% is supplied through pipelines imported from Europe and more from Norway and 21% through liquefied natural gas imports. Russia would provide about 3.4 per cent of British gas in 2020. According to the industry, new oil and gas fields in the North Sea need to be developed to prevent a 75% drop in domestic gas supply.
The British people have had a problematic year paying high energy costs.
Analysts believe that the British people will face at least a 50% increase in energy prices. That about six million British households will not be able to pay their high energy bills from April without government intervention. Data show that 4 million British households lived in fuel poverty at the beginning of 2021. If energy prices rise in line with increasing market prices, another 2 million will be added. “Families and businesses are facing an energy price crisis because a decade of failed Conservative energy policy has left us deeply vulnerable as a country,” said Ed Miliband MP, Labour’s shadow climate change and net-zero secretary.
Conclusion
Energy prices in the UK are projected to rise by more than 50% by April, and 6 million British households will not be able to pay their high energy bills. British families face rising electricity prices due to energy shortages and a challenging year if the government does not intervene. The Boris Johnson government has not yet taken action, and forecasts suggest that the number of poor people in the UK will increase in the coming months as energy costs rise.
