UK energy price cap falls to £3,280 from April but bills will still rise
GuardianFeb 27, 2023
UK households will see their energy bills increase by an average of 20% (£500) this coming year, despite energy regulator Ofgem having announced that the energy price cap — which sets the maximum that companies can charge for a single unit of energy — will be lowered for the three months from April 1, 2023.
The average annual bill for a dual fuel household paying by direct debit is currently £2.5K and has been kept artificially low via the government's Energy Price Guarantee (EPG). Through the EPG, the UK Treasury has been subsidizing energy bills by paying energy companies the difference between the Ofgem Energy Price Cap level (currently set at £4,279 until Mar. 31, 2023) and the £2.5K figure.
It is vital that the chancellor listens to campaigners and charities and continues support for vulnerable households in the midst of the ever-worsening cost-of-living crisis in the UK. Despite a decline in wholesale prices, energy companies are continuing to profiteer while ordinary Brits struggle to afford basic necessities. More government intervention must be undertaken to stop rising prices.
Though the announcement that the price cap is decreasing may appear positive news, Ofgem is merely attempting to cover itself against criticism by suddenly embracing a socialist approach. Due to its previous failings to effectively preempt the market and, in some instances, failing to act at all on spiraling prices, the treasury was forced to intervene and subsidize Brits when costs spiked. This watchdog has done nothing to dampen the volatility of the market and its reactive stance over recent months has fueled unnecessary government deficit at a time when the UK economy cannot afford to expand state funding.
Public ownership of energy is the only answer to this broken system. Privatization was justified on the basis that it would encourage competition, thereby lowering consumer prices. The opposite has proved to be true — energy companies are getting away with charging consumers grossly overinflated prices and making huge profits without any accountability. The shareholders (and the overpaid executives) must be taken out of the equation altogether for the public good.
There is a 50% chance that the UK will consume at least 612 Terawatt-hours of natural gas in the year 2040, according to the Metaculus prediction community.