Analysts have suggested annual bills could soar past £2,000 for the first time
Image: Getty Images)
Brits should expect a “significant” hike in energy costs in April when the cap on household bills is reviewed, the industry watchdog has warned.
Ofgem boss Jonathan Brearley admitted it was a worrying time for consumers, who also face a hike in national insurance contributions next year.
The existing £1,227 energy price cap will be reviewed in April, which protects households from sudden hikes in their bills.
Analysts have suggested annual bills could soar past £2,000 for the first time, with increases of up to £800 next year.
Mr Brearley told the Today programme: “Unfortunately we have seen an extraordinary rise in the gas price.
“It’s hard to tell how much but we do expect bills to rise in future.”
Asked if the price cap would rise, he said: “Yes that is the expectation. We can’t predict everything, as we have seen the wholesale market has gone up and down extremely quickly.
“We can’t predict fully what that will be but looking at the costs that are in the system, we are expecting a significant rise in April.”
Mr Brearley said the current cap would remain in place until April, with no plans to raise it before then.
Business Secretary Kwasi Kwarteng will hold talks on Friday with the representatives of energy intensive industries, such as steel and chemicals, to discuss the wholesale gas crisis.
It comes after a top White House official has accused Russia of using gas supplies as a “weapon” as the UK grapples with an energy price spike.
US President Joe Biden’s national security adviser Jake Sullivan warned the Kremlin not to exploit spiralling costs as “coercion”.
“The United States has a real concern that, for a variety of reasons, supply is not keeping up with recovering demand,” he said.
Russia is a major natural gas supplier to Europe, and its energy giant Gazprom is now at the centre of a dispute over whether it could do more to ease prices in the spot market.
Asked if Russia was holding back energy as leverage, Mr Sullivan said: “Russia has a history of using energy as a tool of coercion, as a political weapon.”
Transport Secretary Grant Shapps said he didn’t know to what extent there could be “Russian intervention”.
He told Times Radio: “There’s a massive global uplift in prices and, as the world has woken up from, you know, being in a slumber of coronavirus, as with a lot of commodities the price has gone up.
“I don’t know the extent to which there’s sort of Russian intervention. What I do know is, fortunately, 50% of our production is domestic. The vast majority of the rest is from Norway.
“I think I’m right in saying that, of the gas, only about 3% is from Russia, so we’re not directly impacted other than, of course, the global gas price does have an impact overall.”