Due to Russia cutting gas through the Nord Stream 1 pipeline, the UK's energy market spiked causing wholesale gas for delivery for the winter to rise to 535p per therm. Although the Kremlin blamed issues with turbines, others have urged that this is Russia’s retaliation due to sanctions imposed by the west.
British households have been told to prepare for higher price rises because of this. Ofgem, the UK’s energy regulator, is expected to lift the price cap to £3,420 in October. Currently, Ofgem revise the price cap every six months, however, this could move up to every three months as the UK energy market becomes more volatile and energy suppliers struggle. If this is the case then the price cap will rise even further in January, possibly reaching £3850 a year per household.
As energy suppliers are paying more for gas on the wholesale market, the energy regulator must put the price cap up to ensure energy companies are not paying more for supplies than they are getting, which has been one of the main reasons for suppliers collapsing over the past few years.
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