The limiting energy prices In October, Britons are expected to grow from 1971 to £ 2,800 a year, said Ofgem chief Rishi Sunaku, who is stepping up pressure on the chancellor to help Britons struggling with a deepening cost of living crisis.
Energy regulator chief executive Jonathan Brirley told MPs on the Committee on Business, Energy and Industrial Strategy that he would write to the chancellor telling him he expects the limit to be “around £ 2,800” if it is revised later this year. .
Gas prices were “higher and more volatile” on the Russian wave invasion of Ukrainesaid Mr. Brirley.
“I know it’s a very difficult time for customers, but I need to be clear with this committee, with customers and the government regarding the likely effects on prices in October.”
He stressed that previously wholesale prices calculate the Ofgem cap were uncertain and could change from now to October.
Mr Bryrley’s warning came at a time when petrol and diesel prices had risen to new record highs, and Rishi Sunak was reportedly considering introducing income tax on energy generators who have made huge profits, while British households are facing a cost of living crisis.
The chancellor has instructed Treasury officials to work on plans for a potential tax on more than 10 billion pounds of surplus profits generated by electricity generators, according to sources cited by the agency. Financial Times.
High prices have benefited power generators, but have also led to the failure of dozens of suppliers.
Former Ofgem CEO Dermot Nolan admitted to lawmakers on Tuesday that the regulator could have stopped some of these failures, “if we had moved faster.”
Mr Nolan, who headed Ofgem from 2014 to 2020, told the committee he did not believe that any regulatory regime could have prevented the bankruptcy of a large number of energy companies as a result of the unprecedented rise in gas and electricity prices.
He described the recent increase in wholesale energy costs as a “100-year event” and argued that Ofgem had followed government requests for competition over regulatory oversight due to the dominance of the Big Six firms in the market.
Mr Nolan argued that Ofgem’s ability to control the firm was hampered because the introduction of price restrictions took up “huge resources”.
Asked why he allowed the Ofgem performance team to be cut by a quarter between 2018 and 2021, Mr Nolan replied: “I don’t know. I literally don’t remember. “
The regulator has been severely criticized for allowing too many firms to be set up with minimal checks on whether they have the necessary skills or are financially stable enough to survive large price fluctuations.
Customers and taxpayers were left to raise bills for dozens of failed firms, some of which collapsed after failing to properly hedge against the risk of soaring prices.
Mr Nolan said that around 2015 “many” new firms had entered the market under a “permitting” regime, “encouraged by the government but also by a conscious decision of the Ofgem board of directors”.
Ofgem did not think it could allow only large firms with large capital to enter the market, Mr Nolan said. He acknowledged that the companies were allowed to collapse without financial damage to their owners.
However, since 2017/18, it has become clear that “in some cases, firms have entered the market speculatively, which was probably not smart and unfair, and we needed to do something about it”.
Mr Nolan said: “I don’t think any regime would be entirely fit for purpose, but I accept that if we had moved faster, we would have stopped some of the failures that have taken place.”
Downing Street acknowledged that energy prices were a “significant problem” after Bryrley suggested the limit could rise to about £ 2,800 in October.
A spokesman for the prime minister said part of the aid from the government “arrived within a year”.
Meanwhile, fuel prices continued to rise to record highs, and new official figures show that the average price of a liter of petrol in the British suburbs was 167.7 pence on Monday.
That’s up from 165.1 a year earlier. The average price for diesel on Monday was 181.14 pence per liter compared to 179.7 pence last week.