The appointment of Liz Truss as the new prime minister was accompanied by a promise of more help for households facing a further surge in energy prices, especially following the announcement by Ofgem of an Energy Price Cap of £3,549 due to start from October 1st.
Responding to the need for more help, the government unveiled a package that will create an ‘Energy Price Guarantee’, ensuring that the average household will now pay a maximum of £2,500 a year until 2024, on top of the other help announced earlier in the year that will include a £400 discount for every household and extra support for those on benefits.
All this may come as some relief to gas users, not least as nobody knows how long gas prices will be elevated for.
While the commodity has been trading lower than it was at the start of the month after the UK government action and the EU backed measures to decouple electricity prices from those for gas, the fact is wholesale prices will soar further if Russia seeks to reduce or cut off gas supplies to the west this winter in a bid to weaken European support for Ukraine’s war effort.
All this means if you need boiler repair in Lewisham, a gas fire fixing in Greenwich or gas central heating mended in Clapham, now is a good time to do it because you will still need your energy efficiency to be as good as possible this winter.
It should be remembered that the Energy Price Cap has been changed every six months and, until the latest intervention, had been set for three-monthly upgrades. While it will not now reach £3,549 or any of the higher figures predicted for 2023, it should also be noted how much it has risen by.
The cap was raised in by 54 per cent in April from £1,277 a year to £1,971. It is notable that even at £2,500 the average increase will be £529 from October, on top of the £694 increase in April, while the extra help devised when Rishi Sunak was chancellor was based on the April figure.
Other factors that may help with prices include the fact that Centrica has been allowed to start re-using the mothballed Rough Storage Facility off the East Yorkshire Coast, which will help bolster Britain’s storage capacity.
While the UK only got a very small amount of gas from Russia before the war and now imports none – supplies come from a mixture of the UK’s North Sea fields, Norway and imported liquid natural gas – having more gas in storage will help keep costs down if there is a further supply squeeze cynically mandated by The Kremlin.
In the longer run, there has been much talk about speeding up the shift away from fossil fuels as the dangers for Europe of relying on Russian hydrocarbons has been exposed. But far from this meaning Londoners will stop using gas very soon, the UK government is now looking to allow more gas extraction from the North Sea and lift the ban on fracking for shale gas.
All this means that while the reliance on gas may fall in the years ahead, what matters right now is finding supplies and making the most efficient use of them – including through the performance of appliances in homes.