UK Government Nightmare: Energy Bills Sky High And Rising

  • Date: 19/02/13
  • Amy Wilson, The Daily Telegraph

The average dual fuel bill per household is £1,420 a year. That compares to an average of £885 in January 2008. More than six million households in the UK are struggling to pay their energy bills.

Few subjects unite the public and politicians like energy bills.

In recent years, they have come together in outrage over utility companies putting up their prices when wholesale gas prices rise, and not bringing them down when there’s a fall.

The popular consensus is that they are profiting while pensioners and other low-income households shiver.

The energy industry has pointed the finger of blame at falling UK oil and gas production, greater demand for gas from around the world, and subsidies for investment in renewable energy and the UK’s power infrastructure.

In 2004-2005, a period of falling gas prices came to an abrupt end.

It was the same year the UK first imported more gas than it produced from the North Sea.

Importing means more exposure to the global market, which is affected by events that may hurt supply, and demand for energy in fast-growing emerging economies.

European gas prices are also linked to the oil price.

When British Gas announced it was raising gas and electricity prices in October last year, it said that £50 of the average £80 increase on a dual fuel bill was not related to commodity costs, but down to an increase in the cost of delivering energy because of investment in the national grid, the UK’s environmental policies and social costs from initiatives to help households in fuel poverty.

The company also estimated wholesale gas prices would be about 15pc higher this winter than last.

What is undeniable is that bills are a far greater household expense than they were even five years ago.

The average dual fuel bill per household is £1,420 a year, the latest figures from regulator Ofgem show. That compares to an average of £885 in January 2008.

More than six million households in the UK are struggling to pay their energy bills, according to Consumer Focus.

One of the stated aims of the Energy Bill currently going through Parliament is to reduce the UK’s reliance on imported gas, so households are less exposed to the price fluctuations of the global market.

To secure investment in renewable energy, such as wind power and nuclear, the Bill gives energy companies the ability to increase the amount they charge households and businesses for green investment to £7.6bn a year by 2020, up from £3bn now.

Some estimates show the subsidy will push up bills by about £100 a year.

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