Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

UK Gov't Stands Firm on Household Price Cap Amid Energy Market Jitters

UK Gov't Stands Firm on Household Price Cap Amid Energy Market Jitters

Rampant speculation on the energy market has seen the price of natural gas futures more than double in recent weeks — before crashing back after Russia pledged to honour all existing contracts via its network of pipelines. But entrepreneurs in Britain's oversaturated market fear their profit margins will be cut to the bone.

The UK's business minister has insisted the household energy price cap will remain in place despite yo-yoing energy market prices and pressure from industry.

Business, Energy, and Industrial Strategy Secretary Kwasi Kwarteng told Sky News' Trevor Phillips on Sunday morning that the current price control limit, set by regulator Ofgem in August, would stay in force for the full six-month term from 1 October of this year to 1 April 2022.

"Many companies during this period have said that we should lift the price cap or get rid of it", Kwarteng said. "And I've been very clear that it can't be moved because it does offer consumers the protection that we all need against very, very high upswings in the price".


The cabinet minister also resisted Phillips' goading suggestion that the government was advising the public to wrap up warm and turn the thermostat down.

"I'm not going down that route. I think people are perfectly sensible users of energy", Kwarteng said. "All I am guaranteeing, or attempting to guarantee, is security of supply".


Kwarteng explained that 50 percent of the UK's gas supply in 2020 was domestically-produced, 30 percent came from Norway — whose energy minister told him a fortnight earlier the country was increasing gas output — and 20 percent from liquified natural gas (LNG) imports from around the world.

Phillips is a former member of the London Assembly for the opposition Labour Party, and was on the board of the Britain Stronger in Europe campaign against Brexit — which Tory Prime Minister Boris Johnson delivered.

Business Concerns


Kwarteng also stressed that while the price cap would not be extended to business users, they've already benefited from existing subsidies.

"We've already got subsidies in place and it's very clear that a lot of those are working", he said. "On the consumer side we've got an energy price cap and on the industry side we have measures where we support industries, heavy electricity users".


"I'm speaking to government colleagues, particularly in the Treasury, to try and see a way through this", Kwarteng added.

But an unnamed source at the Treasury denied the business secretary had approached the department.

"This is not the first time the BEIS secretary has made things up in interviews", the source told Sky News. "To be crystal clear the Treasury are not involved in any talks".


Industry group Energy UK chief executive Emma Pinchbeck warned that more "fragile" intermediary household supply companies could go bankrupt over the winter — and claimed that would mean price rises for consumers.


Britain's privatised energy market has scores of companies competing to act as intermediaries between the generating and supply monopolies and consumers, reading meters and billing users.

The actual supply infrastructure is run by regional Distribution Network Operator (DNO) organisations, currently controlled by just seven companies, while generation is in the hands of other firms — including the French state-owned national power utility EDF.

Market Mayhem


Prices on the gas futures market have more than doubled in recent weeks — amid speculation following unusually cold winter and spring weather across Europe earlier this year and a recent period of calm winds that hit electricity turbine generation — causing severl energy billing companies to go bankrupt.

But Russian President Vladimir Putin's announcement on Wednesday that national gas company Gazprom would honour all supply contracts burst the market bubble — with the pending start of operations from the new Nord Stream 2 pipeline across the Baltic Sea set to increase flow further.

Ironically, the prime minister and his Downing Street spokesman made statements this week claiming Nord Stream 2 would actually harm "energy security" by making Eastern European countries more reliant on Russia.

A total of 10 smaller billing firms have gone bust since August as speculation on the gas futures market has seen wholesale prices double in weeks. The largest of those was Avro Energy, which had 580,000 customers before filing for insolvency in September.

Opposition Response


Labour Shadow Energy Minister Jonathan Reynolds took the opportunity to lay into the ruling Conservatives, insisting the crisis was "directly down to government policy". But he said his party would not nationalise the sector if it were in government, claiming to even suggest so would be "a distraction from the poor government choices that have been made".



Liberal Democrat leader Sir Ed Davey called for the energy bill discount to elderly to be tripled.


 


AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
House Republicans Move to Defund OECD Over Global Tax Dispute
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
Intel Reports Revenue Beats but Sees 81% Rise in Losses
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
CEO Resigns Amid Controversy Over Relationship with HR Executive
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
Tulsi Gabbard Unveils Evidence Alleging Political Manipulation of Intelligence During Trump Administration
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Trump Announces Coca-Cola to Shift to Cane Sugar in U.S. Production
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Air India Pilot’s Mental Health Records Under Scrutiny
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
Moonshot AI Unveils Kimi K2: A New Open-Source AI Model
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Bitcoin Reaches New Milestone of $116,000
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
×