"Energy consultancy Cornwall Insight predicts that Ofgem's price cap for the period from July to September could reach £1,801 per year for a typical dual-fuel household. This is about £160 higher than the cap set in April, representing a roughly 10% increase. Cornwall Insight describes this potential rise as a 'cause for concern' and notes that higher gas costs will also impact electricity prices, given the UK's ongoing reliance on gas-fired power generation."
"Wholesale gas prices have risen sharply following missile strikes by the United States and Israel on Iran, which led to retaliatory attacks damaging critical oil and gas infrastructure in key Gulf states. QatarEnergy has paused production of liquefied natural gas (LNG) at some affected sites, further tightening global supply. Additionally, Iran has issued warnings to vessels regarding their passage through the Strait of Hormuz—a crucial shipping route responsible for approximately 20% of global oil and gas flows."
"While Europe and the UK do not rely heavily on Qatari LNG directly, the reduced supply is expected to increase competition among major Asian importers such as Japan, South Korea, and Pakistan, which could drive up global prices. However, the consultancy emphasises that the final cap level will depend on average wholesale prices over a three-month assessment period."
UK household energy bills are expected to increase by approximately 10% starting in July 2024, reaching around £1,801 per year for typical dual-fuel households according to Cornwall Insight. This £160 increase from April's cap is driven by surging wholesale gas prices linked to Middle East tensions, including US and Israeli missile strikes on Iran and subsequent retaliatory attacks on oil and gas infrastructure. QatarEnergy has paused LNG production at affected sites, while Iran's warnings about Strait of Hormuz passage threaten approximately 20% of global oil and gas flows. Though the UK doesn't directly rely on Qatari LNG, reduced supply increases competition among Asian importers, driving up global prices. The final impact depends on average wholesale prices during the three-month assessment period, with potential for smaller increases if market volatility proves temporary.
#uk-energy-bills #wholesale-gas-prices #middle-east-tensions #energy-market-volatility #ofgem-price-cap
Read at London Business News | Londonlovesbusiness.com
Unable to calculate read time
Collection
[
|
...
]