Households are on average £3,400 worse off because of a series of energy shocks over the past five years, research has found. Bills have jumped due to unexpected events that sent wholesale energy costs soaring, with ordinary customers paying the price.
Global prices for gas and electricity started to increase from summer 2021 as economies reopened after pandemic lockdowns. The rise was intensified by reduced fuel supply from some producers and tensions between Russia and Ukraine, leading to all-out war. The latest chapter comes with the Middle East conflict, with predictions that higher oil prices will feed through to household bills from the end of summer.
Analysis from the Energy and Climate Intelligence Unit (ECIU) found gas and electricity bills for a typical household are £4,800 more over the five years since 2021 than in the previous five years. Government support schemes in 2022 and 2023 paid around £1,400 of the extra costs, leaving households paying an extra £3,400 directly on bills.
Jess Ralston, energy analyst at the ECIU, said: “Households are being hit by back‑to‑back gas crises caused by wars thousands of miles away. Many families are still carrying debt from the last spike and have little resilience left to absorb further increases, with higher bills expected from July.”
She added that the UK has made major progress in reaching net zero emissions, rolling out renewables which are lowering wholesale electricity prices and strengthening energy security by cutting gas imports. Wholesale gas costs and VAT account for around three-quarters of the extra costs over the past five years.
