LONDON, May 27 : British energy bills are set to rise this summer, the sector regulator announced on Wednesday, as the Middle East war drives wholesale gas prices higher.
The US-Iran conflict, with its effective months-long closure of the crucial Strait of Hormuz, has sent oil and gas prices soaring and raised concerns about a fresh spike in inflation.
Energy market regulator Ofgem said the price cap that suppliers can charge customers will increase by 13 percent from July, adding around £18 ($24) per month to the average bill.
A typical annual bill for gas and electricity will rise to about £1,862 per year, Ofgem, which sets the cap every quarter, said in a press release.
The regulator cited “volatility in global energy markets” as a reason for the unusual summer increase, a period when energy demand is typically lower.
“Higher wholesale gas prices, driven by ongoing conflict in the Middle East, is impacting the price we pay for energy,” said Ofgem chief executive Tim Jarvis.
However, gas prices remain well below the height of the energy crisis in 2022 following Russia’s invasion of Ukraine in February that year, Ofgem added.
Britain’s annual inflation rate fell more than expected in April, largely due to a drop in energy prices in the months leading up to the war.
Analysts expect the rate to shoot back up in the coming months as higher energy costs feed through to household bills.
“The rise in the price cap because of a war we did not choose is deeply unwelcome news for households across the country,” Energy Secretary Ed Miliband said in a social media post.
“It is essential to de-escalate this conflict to bring oil and gas prices down,” he added.
