A spike in gas prices on Monday has added close to £500 to the forecasted energy price cap next year – heaping further woe on families who would already struggle to keep the heating on.
Experts now expect that the energy price cap will be set at £6,552 in April, based on Monday’s gas price.
Prices soared as markets opened on Monday after Russia said it would run maintenance on a key gas pipeline that connects the country with Germany.
State gas giant Gazprom said that the Nord Stream 1 pipeline will be shut off entirely for maintenance for three days next week. But experts fear it might not reopen as Russia tries to put pressure on Europe’s economies.
It means that the price cap prediction for April from energy experts at consultancy Auxilione is £463 higher for April.
They expect the price cap to rise to £3,576 from the start of October, hitting £5,066 in January before rising even further to £6,552 from April.
It will then fall back a little, but still remain at what would have been record prices previously, hitting £5,897 in July 2023 and £5,548 three months later.
“The nervousness of the market appears to increase day by day as we edge closer to winter delivery, now just five weeks away, and no big positive news on the horizon,” Auxilione said.
“The planned outages in a week’s time have captured the attention of the market and are driving concerns further – as yesterday’s market activity demonstrated.”
Ofgem is set to announce its price cap decision for October at the end of this week. Analysts widely expect the cap to top £3,500, from £1,971 today.
Even this now modest-looking rise will put enormous pressure on households over the winter months when heating is turned on in homes.
All households have been promised £400 of help, with more for the vulnerable. But experts say this will not even be enough thanks to the latest price cap forecasts.
The Liberal Democrats, Labour and most major energy suppliers have backed similar plans to cap prices at current levels.
That would take enormous pressure off households – and spread the costs of a tough winter over several years.
The Government has said it will not announce further bill support until a new Prime Minister is in place.
