Energy bills could rocket by up to 50% for millions of households in the spring, an industry boss has warned.
Emma Pinchbeck, chief executive of Energy UK, the trade body for suppliers, admitted a massive rise in the cost of gas and electricity for customers would hit just as inflation is set to spike – worsening a cost of living crisis.
“It is looking pretty serious for the spring,” she said. “Domestic energy bills are going to go up 45% to 50% we think, in the spring, and that reflects the steep rise in the wholesale price.”
It comes after consultants Cornwall Insight predicted the price cap set by regulator Ofgem could rocket from £1,277 to £1,865 in April, when it is next due to change.
The cap impacts the price paid by around 15 million households on standard tariff or other default deals, as well as those on pre-pay meters.
Cornwall Insight warned there was a risk that by October, when the cap is scheduled to be reviewed again, the average could reach £2,240 a year, nearly £1,000 more than now.
The cost of gas has leapt to a record high factors, from increased demand as economies emerge from lockdowns, to limited supplies. The UK is now reliant on imported gas, the price of which is affected by global pressures.
Experts warn sky-high prices could force some big industrial users to suspend production. Ms Pinchbeck called for the Government to step in.
She said: “Many other governments across Europe have reduced taxes or VAT. There are also policy costs on energy bills the Government was consulting on removing on electricity bills.”
Energy suppliers had been paying 54p per therm of gas at the beginning of the year. That peaked to £4.50 this week. It has driven around 28 energy suppliers to the wall.
Shadow Climate Change and Net Zero Secretary Ed Miliband said: “The Government cannot stand by and let families be clobbered by rises in bills.”
A Government spokesman said: “The energy price cap is insulating millions of customers from record increases in global gas prices. We continue to support those most in need.”
