Why are energy prices rising – UK crisis explained as household bills soar


A dramatic increase in the cost of wholesale gas has caused energy bills to soar across the country. Here’s everything you need to know about the UK energy crisis

Woman warming hands near electric heater at home
Households are warned that energy bills could soar further by spring 2022

As the pressure of rising costs continues to mount on the energy industry, households across the UK have been warned that their energy bills could go up even more in 2022.

Wholesale gas prices have continued to climb throughout last year, leading to soaring energy bills.

Now, trade body Energy UK has predicted that gas and electricity bills could rise by a further 50% by spring this year.

Industry leaders are calling on the government to intervene in what could be a “national crisis,” on the back of this forecast.

Here’s why energy bills have been skyrocketing and why it’s expected to increase even more from April 2022…

Why are UK energy prices going up?

Various geopolitical reasons have led to an energy crises across the UK and Europe
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There has been an international squeeze on energy supplies in recent months, impacting countries globally.

As a result, costs have risen steeply.

Last winter was particularly cold in Europe – this meant that stored gas supplies were low.

There has also been an increased demand for liquefied natural gas in Asia – especially China.

There are a whole variety of technical and geopolitical issues at play as well, which has left much of Europe struggling with supplies.

The increased cost of living has caused UK households to be hit by rising energy bills, especially in the second half of 2021.

As a result, energy regulator Ofgem increased the energy price cap from October 1, 2021 to £1,138 a year.

While the energy price cap reduced some of the financial burden on energy companies, it resulted in consumers being switched over to significantly increased rates or tariffs.

How much will bills increase by?

While the energy price cap is due to be revised by Ofgem this February, experts are anticipating a rise of 50% in consumers’ energy bills by April 2022.

Energy UK chief executive Emma Pinchbeck has warned that “domestic energy prices are going to go up 45% to 50% in the spring”.

According to another expert, energy sector specialist Cornwall Insights, bills could rise by 46% under the new revisions going from £1,277 a year under the current price cap to £1,865 a year.

They also predicted that there could be another spike in the quarterly revaluation in August 2022 taking the prices up to £2,240 a year.

How long will bills keep rising?

Energy bills are expected to keep rising until 2023 plunging millions into fuel poverty
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Energy bills are expected to keep rising until 2023 at least, according to experts.

There seems to be no sign that energy market prices will begin to fall and the cost of failed energy suppliers – which is paid through energy bills – is expected to continue to rise.

This bill hike could result in millions of households being plunged into fuel poverty. Senior energy leaders have set out options to help the UK Government contain the crisis, which includes the Treasury cutting bills by 5% by waiving the VAT rate on gas and electricity.

Should I fix my energy prices?

Before the energy crisis, it would be have been a good idea to compare gas and electricity prices and switch supplier or tariff to get the best deal.

While a fixed deal will give you price security, you might have to pay a premium for it which currently costs more than the price cap.

Tips to keep your bills low:

  • Insulate your home well so that you won’t waste money on heating. Fill cracks around doors, windows and between floorboards and buy draught excluders for any chimneys
  • If replacing any products, make sure to check energy ratings and buy the best you can afford
  • Install solar panels or an air source heat pump which can be expensive but cut your bills in the long run

You can also do simple things for free to cut your bills including switching off lights when you leave a room, putting on another jumper and turning down the heating, limiting your time in the shower to four minutes and bleeding your radiators.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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