Despite falling wholesale prices for gas and electricity, household energy bills continue to rise. This raises several questions about the reasons and consequences of this situation.
The Paradox of Rising Prices
From October 1, Ofgem will raise the energy price cap by 2%, adding about £35 to the average annual bill and pushing it to roughly £1,755. Although this increase seems modest, other factors such as grid maintenance and renewable balancing costs are contributing to rising prices.
Household Budgets Under Pressure
For families already under pressure, £35 is not just loose change. This increase comes after years of price hikes, where since Russia's invasion of Ukraine, average annual energy bills have risen by approximately £600. Household energy debt hit a record £4.1 billion last winter, and standing charges now account for nearly a fifth of the typical bill.
Impact on Vulnerable Groups
The harshest impact falls on the least able to cope. More than one million older households are already in fuel poverty, facing the necessity to turn off heating or reduce living expenses. Charities warn of potential 'dangerous cutbacks,' where individuals may disconnect medical devices to save on costs.
The rise in energy prices raises important questions about social fairness and ecology, highlighting the complex challenges facing the UK in the context of transitioning to clean energy.
