Brits will see “significant rises” in energy prices next spring, regulator Ofgem has warned.
Jonathan Brearley, chief executive of the energy regulator, said prices are likely to go up “significantly” for households next April. He added that the watchdog will look at how the energy price cap is calculated, in light of soaring wholesale gas prices. He told BBC radio 4’s Today programme:
“We can’t predict everything, and the wholesale market, as we’ve seen, has gone up and down extremely quickly so 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…
“We do expect significant rises in prices.
“This is an extraordinary event, this is an incredible change we’ve seen since August in the underlying price of energy. Naturally any regulator is going to look at that and think: well what does this mean for the systems and the processes and the formulae we need to calculate things like the price cap. We need to have a wider look across the regulatory framework to make sure the system is robust enough to manage this sort of thing in the future.”
He also said other countries face similar challenges.
“The root cause of this is an extraordinary change in the gas price. It isn’t just Britain that’s struggling with this. We talk to regulators across the world. Look at France, Spain, Germany, Japan, all systems are struggling to cope. with such an extraordinary change. We need to sit down with the industry, look forward and make sure we make a more resilient market that can manage shocks like this in the future.”