The price of gas soared again today sparking fresh fears over spiralling energy bills for millions of households this winter.
Benchmark European prices rose by 30 per cent to €272 per megawatt hour in early trading this morning in response to growing concerns over Russian threats to strangle gas supplies to Europe.
Russia indefinitely suspended natural gas flows through the Nord Stream 1 pipeline to Western Europe on Friday with state-backed energy giant Gazprom blaming a technical fault.
The surge in the gas price this morning partly caused the euro to slump to a 20-year low against the US dollar.
Although the UK is not reliant on Russian gas, limiting supplies to major EU countries such as Germany pushes the wholesale price for gas higher, adding to the pressures on UK households.
The average price for British consumers is already set to rocket to £3,549 per year from October 1 with even steeper rises forecast for next year.
Britain’s new Prime Minister is under intense pressure to announce immediate support for struggling families as they face the biggest squeeze on living standards in decades.
Germany yesterday announced a €65 billion package of emergency measures to help people deal with inflation and rising energy bills including a plan to allow households a basic volume of electricity at reduced prices, partly funded by a windfall tax on energy companies.
Meanwhile Sweden and Finland both announced emergency energy plans over the weekend to help companies struggling with soaring prices.
Energy bosses have proposed schemes which would see energy prices frozen at their current level with the Government subsidising the firms for the difference between that and rising wholeale prices through loans which could be repaid over the next few years. OVO Energy founder Stephen Fitzpatrick, who has put forward a 10-point plan to deal with the crisis including a targeted cap on prices for the poorest households, said he was expecting to meet with ministers in the coming days.
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“So we’re expecting to meet with the new government as soon as possible,” Mr Fitzpatrick told ITV’s Good Morning Britain. “We’ve been told already over the weekend that this is the first order of business and that we should expect to be meeting ministers and their advisers in the coming days.”
On the possibility of a price freeze, he added: “I think they’re looking at a lot of options. And I think the intent is to find something that can be implemented simply and immediately. And I’m delighted to hear that. I think we’ve kind of waited a long time to find out what’s going to happen. I understand the need to wait for there to be a new prime minister. This is a lot of money we’re talking about.
“We’ve waited a long time. I wrote an article, last December, headlined we’re sleepwalking into an energy crisis of 2022. And we have, but it isn’t too late.”
The UK economy suffered a further blow when the composite Purchasing Managers’ Index, which covers UK service firms and factories, contracted last month in a sign that a recession could be on the way.
It fell due to a “severe and accelerated drop in UK manufacturing output”.
