Gas crisis: Expert issues warning over 'significant' price rises

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Over 20 energy firms have collapsed following the increase in wholesale prices, impacting nearly four million customers in the process. Currently, consumers are protected from big rises in wholesale costs by a price cap set by the regulator Ofgem, however, this cap is expected to change in April.

The latest meeting between the business secretary, Ofgem, and energy firms is set to take place on Monday.

Chief executives of leading energy companies and the regulator Ofgem are likely to discuss soaring bill prices.

Also expected to be on the itinerary for business secretary Kwasi Kwarteng is how consumers are going to be protected against the rising cost of household energy.

However, Ovo’s boss Stephen Fitzpatrick told the BBC the government is showing “nowhere near enough urgency” in finding a solution to the steep prices.

He added that people’s households bills could soar further, and could even be set to double if the government don’t intervene.

He said: “It is already households’ largest single bill to pay and it is going to double that.

“And I think expecting consumers to shoulder that kind of volatility without any kind of support from government is just unrealistic.”

The energy boss also predicts that the increase in wholesale gas prices and the knock-on impact on people will be “an enormous crisis for 2022”.

Mr Fitzpatrick, who is attending the virtual meeting on Monday, said: “We’ve seen this energy crisis unfold now for the last three months and we’ve watched as energy prices have spiked, fallen back, and spiked again.

“We’ve had more than 30 bankruptcies in the sector, we’ve had millions of customers forced to change supplier.

“The cost to the consumer has already been more than £4bn.

“We haven’t seen any action from the government or from the regulator.

“There’s an acceptance that there’s a problem, but nowhere near enough urgency to find a solution.”

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Mr Fitzpatrick also reiterated the importance of not “wasting any more time” addressing the issue of rising costs.

He noted that the time of the meeting – occurring between Christmas and New Year – shows “just how urgent everything is”, and those attending the meeting need to “take the opportunity today”.

Over the last few months, the price hike has already had a knock-on effect on ordinary people, businesses, and the economy.

Just last week, UK wholesale gas prices hit a fresh record of 450p per therm, which experts think could take average annual gas bills to around £2,000 next year.

Since then, prices have dropped to 417p but still remain at unprecedented levels.

On another note, according to Ofgem filings published on Wednesday, the rescue of Avro Energy is so far costing bill-payers more than £680m.

The firm was the second-largest supplier to fail after Bulb, which went bust in November.

Following its collapse, Bulb has been utilising a “special administrator” that has access to government funds which help the firm continue to supply gas and electricity to its 1.7 million household customers.

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