Energy bills are likely to remain high for the foreseeable future, according to the boss of Centrica, the company that owns British Gas. Chief executive Chris O'Shea said that while the worst of the energy crisis is over, risks remain.
A new price cap comes into effect this weekend, meaning households with typical energy usage will pay £2,074 per year. Mr O'Shea noted that prices have fallen from the highs caused by the war in Ukraine but are still two and a half times the long-term average.
Cornwall Insight estimates that the price cap will drop further to £1,871 per year from October. However, bills remain £800 more expensive than two years ago. Mr O'Shea warned against complacency, citing recent volatility linked to the Wagner group and Russian military tensions, which caused a 20% spike in energy prices.
Centrica has doubled the gas storage capacity at its Rough facility off the coast of Yorkshire to six days' worth of UK average usage, bringing total UK reserves to 12 days. In contrast, Germany has 90 days, France 103, and the Netherlands 123 days of storage. Mr O'Shea called for a social tariff funded by general taxation to help the most vulnerable customers.
British Gas faced criticism earlier this year for force-fitting prepayment meters in vulnerable homes, leading to a temporary industry suspension. While meter fitting has resumed, Ofgem has imposed stricter rules. Centrica is under investigation by Ofgem and has brought debt collection in-house, but Mr O'Shea acknowledged difficulty distinguishing between those who cannot pay and those who will not.
