The UK is facing rising gas prices, with many energy suppliers going out of business and some factories shutting down.
According to Oil & Gas UK, wholesale gas prices have risen by 250% since the beginning of the year and by 70% since last month.
Why are wholesale prices rising?
There are several reasons for the increase in the price of wholesale gas. Boris Johnson likens the situation to the rest of the country. Television Program, and insisted that the price increase would be temporary.
The prime minister argued that there could be problems. The economy is “bouncing back very strongly” because the world is “waking up from the quaid”.
However, post-lockdown demand is not the only factor. Supply from Russia has recently dried up, and demand is high in Asia, putting pressure on international markets.
In the UK, many gas platforms in the North Sea have been shut down for maintenance due to epidemics.
In a further setback, cables importing electricity from France were damaged last week, and September is no longer a windy month. These problems mean that more gas is needed to generate electricity.
Will my bills get more expensive?
The short answer is that it depends. Some suppliers were already raising prices for those with default tariffs as UK energy regulator Afjim raised the price limit.
Others are locked into year-round deals that set the price for a specific period of time. If your contract expires, you may have to change it to make it more expensive.
Consumers can expect an average price increase of 135 during the winter, according to AFGIM.
Why are some companies breaking up now?
The rise in wholesale gas prices is a major problem for some companies, which are now effectively selling gas to consumers at fixed price deals that cost less than buying it.
Five energy suppliers have gone out of business so far in recent weeks, with some predicting dozens more to follow before the end of the year.
Bulb, the UK government’s sixth largest energy company, is now seeking bailout. The firm provides energy to 1.7 million customers but is reportedly working with financial advisers Lazard to find new sources of cash.
What should I do if my energy supplier breaks down?
Sit tight. Ofgem will take you to a new supplier. Take pictures of your meters, and download or print your bills from the old supplier.
If OffJim takes you to a supplier or a deal you’re not happy with, you can shop around.
If your energy supplier is indebted to you, your money is safe and you should get it back.
Does low energy suppliers mean a worse deal for homes?
Probably. Pricing websites are now showing little in the way of good deals. Regardless of what wholesale prices are doing, less competition can mean less good deals in the future. However, it remains to be seen.
What is the UK government doing about all this?
As energy is a safe issue, it is Westminster’s responsibility to deal with the crisis.
Business Secretary Kosi Quarting is holding an emergency summit with gas company owners this morning. He said small companies would be allowed to go bankrupt with which customers would be auctioned off and those firms would be able to offer cheaper offers.
Over the weekend, Quarting also held one-on-one talks with leaders of energy firms-compared to emergency meetings with businesses at the beginning of an epidemic.
What are the consequences of rising prices other than energy bills?
Rising costs have affected more than household bills. The UK’s largest fertilizer and Co2 producer had to suspend production last week, while NHS Confederation chairman Lord Adobale warned that operations could be canceled.
However, a senior NHS source said the UK government had assured him that access to Co2 would not be affected.
Meanwhile, carcasses of meat and poultry have warned that the birds may have to stop operating to kill animals because they rely on Co2.