Business Minister Paul Scully said the Government was planning for the ‘worst case scenario’ that gas prices remain high
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Brits could see their energy bills go up with talks underway whether the price cap should increase next year, a Tory minister has said.
Business Minister Paul Scully said the Government had to plan for the “worst case scenario” of gas costs remaining high after a global surge in wholesale prices.
Officials are already in talks about reviewing the price cap in April, he said, and admitted there was “pressure” on it due to high global wholesale gas costs.
The cap, which is evaluated twice a year, is set by the regulator Ofgem and aims to protect millions of customers from sudden hikes in their energy bills.
It will rise on October 1 by £139, with the next review due in April 2022.
Analysts have suggested bills could jump again, with an increase of between £300 to the typical default energy deal.
BFY consultants for Energy Helpline, a switching site, predicted the price cap could increase by up to £294.
The cap is designed to protect consumers but soaring global gas prices have piled pressure on smaller suppliers, with two going bust on Wednesday.
Mr Scully insisted the cap would remain in place “as we clearly want to protect customers”.
Asked what the worst-case scenario was for a rise in the level of the cap, he told Sky News: “This is all part of the conversations that Ofgem will set that cap at, because supply prices are based on a number of factors.
“Clearly, as a government, we need to make sure we are planning for the worst-case scenario because we want to make sure we can protect consumers.”
Pressed on what the worst-case scenario looked like, he added: “That is goes on for longer than a short spike. I can’t give you a figure now.”
Boris Johnson has tried to downplay the surge in global gas prices as a short-term problem, but the Business Secretary Kwasi Kwarteng has suggested it could be a more long term problem.
As well as uncertainty over energy bills, Brits have also faced food shortages due to the impact of global gas prices on the production of carbon dioxide (CO2) in the UK.
CO2 is used in food supply chains for products such as meat, salad and bread.
The Government had to bail out a US-owned fertiliser giant – which produces CO2 as a by-product – after it halted production due to the gas price hike.
The firm, CF Industries, has now restarted operations.
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