UK gas prices have surged by 50 per cent to 108p per therm following unplanned outages at oil and gas facilities in the North Sea.
The unexpected outages come on top of extremely low gas storage levels, depleted after weeks of below-average winter weather.
Higher energy prices will affect firms and households. Stephen Littlechild, former Director General of Electricity Supply has written on how government policy will increase household bills. As prices increase, his analysis is particularly relevant:
David Cameron has backed proposals by the regulator Ofgem to simplify energy tariffs. Under the new scheme, suppliers will be restricted to offering no more than four tariffs for each type of fuel, and customers will be put on their supplier’s lowest variable rate unless they choose otherwise. But will these proposals help customers with their energy bills, as claimed? No, they will increase energy prices and exacerbate fuel poverty rather than alleviate it.