This time, it’s the conflict in the Middle East that has driven prices, which has effectively removed one of the world’s top liquefied natural gas exporters, Qatar, from the global market. European buyers are competing with Asia for a reduced number of LNG cargoes, pushing up wholesale prices for both.
It all means that, for British households still heavily dependent on gas for heating and electricity, bills are likely to shoot even higher.
Private sector forecasts for the energy price cap suggest it could rise in January to as much as £1,970, up £250 compared with the limit in place from October.
The last time the cap was higher than that, in March to June 2023, the government was still subsidizing the energy bills of every British household through a guarantee introduced by former Prime Minister Liz Truss. That scheme ended up costing £23 billion.
That sort of expensive, universal support is unlikely this time. Former Chancellor Rachel Reeves previously indicated the government would help the most vulnerable with rising costs while being “responsible” with the public finances.
But her successor, John Healey, will hold his budget on Oct. 28, early enough for any government intervention on bills to ease some of the pain coming in January.