Energy Price Cap Announcement

December 23, 2021

Published by BBC News

‍

WHY ARE GAS PRICES SO HIGH AND WHAT IS HAPPENING TO FUEL BILLS?

‍

The cost of gas on the wholesale markets is soaring again, placing renewed pressure on suppliers.

‍

It is also having an immediate impact on some businesses' energy bills.

‍

Many thousands of households have seen energy prices rise. after their supplier went bust. Millions are set for a huge increase in prices in April when a new cap comes into force.

‍

There has been a worldwide squeeze on gas and energy supplies.

‍

As a result, wholesale energy prices rose sharply and, in recent weeks, have hit their highest levels of 2021.

‍

Reasons include:

  • A cold winter in Europe last year put pressure on supplies and, as a result, stored gas supplies were low
  • A relatively windless summer meant it was difficult to replenish those supplies
  • There's been increased demand from Asia - especially China - for liquefied natural gas.

‍

There are a number of technical and geopolitical issues at play as well, which means many countries across Europe are grappling with the same problems.

‍

However, the UK is hit relatively hard hit because it is one of Europe's biggest users of natural gas - 85% of homes use gas central heating, and it also generates a third of the country's electricity. Storage capacity in the UK is lower than in some other European countries.

‍

Tags:
Energy
  

First Ram Ltd is not responsible for the content of external websites. The inclusion of a link to a third party website, on any of our pages, should not be construed as an endorsement.

First Ram Ltd is not responsible for the content of external websites. The inclusion of a link to a third party website, on any of our pages, should not be construed as an endorsement.