Energy bills 'set to soar by £288 more a year' due to Iran war
Energy bills for the average household could rise by as much as £288 a year as a result of the war in the Middle East, according to an Ofgem price cap prediction.
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A forecast by energy market experts Cornwall Insight suggests that costs could increase by as much as 18%, or £288 a year from July, with the price cap from July to September predicted to be at £1,929 for a typical dual fuel household.
The April price cap was set at £1,641 per year for a typical UK home before the war in Iran impacted energy costs.
Cornwall Insight said: "Wholesale gas prices surged after the Middle East conflict disrupted tankers moving through the Strait of Hormuz, a major route for global Liquified Natural Gas (LNG), and damaged key oil and gas facilities in the Gulf. Markets are still feeling the impacts of the conflict and remain highly volatile."
The group warned that “a higher price cap in July is effectively unavoidable.”
“Should high gas, power and oil prices continue, the effects will go beyond household bills. Inflationary pressure and rising project costs could start to weigh on investment decisions and slow the pace of new infrastructure, although the full extent of these knock-on effects will take time to become clear,” it added.
The prediction is yet more dire news for hard-pressed British households. It also emerged today that drivers have paid more than half a billion pounds in higher fuel prices, according to new analysis.
Motoring research charity the RAC Foundation estimated that rises in pump prices since the conflict in the Middle East began on February 28 have led to motorists paying an additional £544 million for petrol and diesel.
Read more: NHS chief says UK has 'only days' before some supplies run out due to Iran war
This consists of £409 million for diesel and £135 million for petrol.
The figures are based on average daily pump price rises and last year's fuel consumption rate.
Steve Gooding, director of the RAC Foundation, said: "The pump price premium paid by drivers since the war started now totals well north of half a billion pounds and is currently rising by about £37 million a day.
"At this rate the war will have cost motorists at least a billion pounds at the forecourt within the next couple of weeks."
"Three-quarters of the 'war premium' is being paid by diesel drivers.
"This is partly because more diesel than petrol is sold in the UK, but also reflects the record gap between the prices of petrol and diesel now seen at the pumps."
Oil prices - which have a significant effect on the cost of wholesale fuel - have soared in response to Iran's stranglehold on tankers passing through the Strait of Hormuz.
Motoring services company the RAC said the average price of a litre of diesel at UK forecourts on Monday was 181.2p.
That represents a 27% increase from 142.4p on February 28.
Average petrol prices have reached 152.0p per litre, a rise of 14% from 132.8p over the same period.
The AA said the petrol price gap between supermarket and non-supermarket retailers has widened from 5.4p per litre before the war began to 7.6p per litre.
Diesel has an even bigger disparity at 8.8p per litre.
The AA said the widening price difference helps explain why many drivers were "drawn to the supermarkets" last weekend, which led to "pressure" on their fuel supplies.
There appears to be a similar situation in France, with online maps showing the majority of its forecourts that had limited supplies or were dry on Sunday were supermarket or discount store sites.
The AA said 1.6% of French filling stations reported running low on fuel, with 0.2% completely out.
Luke Bosdet, the AA's spokesman on pump prices, said: "With drivers getting hammered by big price increases since they last filled up, it's no wonder they are seeking out the cheaper fuel stations.
"These tend to be supermarkets, for now.
"Pressure on supermarket supply comes at predictable times and places - weekends and cities.
"However, generally speaking, the AA notes that disruptions have not been widespread, and are quickly resolved when they happen."
On Tuesday, the Government will publish a list of some of the third-party fuel-price apps and websites using pump price data from its Fuel Finder scheme.
They include Confused.com, DriveScore, Fuel Finder UK, Fuel Spy, MotorMouth, PetrolPrices.com and RAC Fuel Watch.
All UK forecourts have been required to report price changes to the Fuel Finder database within half an hour of a change since February 2.