Household energy bills to soar by £220 as Iran war impact hits

The energy regulator has announced a 13-percent rise to its energy price cap to apply in England, Wales and Scotland from July.

The increase will push the typical household bill up by £200 to £1,862 from July, up from £1,641.

The regulator said the increase was the result of higher wholesale gas prices caused by the conflict in the Middle East.

Based on the energy use of a typical domestic household, from July the price cap will rise by £18 a month for the average household using both electricity and gas if this level was sustained for a year.

Customers will see a smaller price increase of around 5% on their electricity bills compared to gas bills, which are rising by 24%, Ofgem said.

Ofgem chief executive Tim Jarvis said: “Today’s price change reflects continued volatility in global energy markets. This means higher wholesale gas prices, driven by ongoing conflict in the Middle East, is impacting the price we pay for energy."

Energy Secretary Ed Miliband said: "The rise in the price cap because of a war we did not choose is deeply unwelcome news for households across the country. We know people were under pressure before this crisis, and that’s why easing that burden is our number one priority.

"To help people facing higher costs, the Chancellor acted last week to freeze fuel duty and made bus travel free for children across England in August. We have taken £150 average costs off energy bills for the years ahead and we have also extended the warm home discount for around six million families.

“We will continue to monitor the situation ahead of the winter and plan for all contingencies. In the immediate term, it is essential to de-escalate this conflict to bring oil and gas prices down, and as Britain faces the second fossil fuel crisis of this decade, we must learn the right lessons.

“The way to get bills down for good and avoid these price spikes is to go further and faster with this Government’s drive for clean homegrown power we control.

“We are upgrading as many homes as possible ahead of winter with the biggest investment in warm homes in British history.”

The price cap refers to the default tariff applied when a customer has not signed for a fixed-rate deal.

It sets a maximum price per unit of gas and electricity, meaning households only pay for the amount of energy they use.

Currently, 40% of accounts – or 22 million – are fixed tariffs, according to Ofgem figures, and are therefore unaffected by this price rise.

Gillian Cooper, director of energy at Citizens Advice, said: “Energy bills are going up again in July, which will be painful news for already-stretched households.

“One of the key tools to help people through this – the energy debt relief scheme – keeps being delayed.

“The scheme should be supporting people struggling with historic energy debt right now and the Government needs to put it in place as soon as possible.

“And as we head into the summer, the Government must use this time to prepare wisely, ahead of autumn.

“Families with children, disabled people and those struggling to pay rent need better targeted support in place before it’s too late.”