To think that very few people can manage £4200 energy bills

[Butterflyfluff]

news.sky.com/story/energy-bills-forecast-to-rise-even-higher-than-previously-thought-12668906

This simply isn’t manageable for the majority of people.

Where’s this going to end?

It's absolutely horrendous and the winter is going to be very bleak for some. We're on a fix until October, and I keep hoping that the government will do something before then.
We're very fortunate to be in the position to be able to pay the higher rate, but it will be a case of heat your house and stay in it. It will be at the expense of meals out, new clothes, trips to the cinema, nights away etc etc. And what will that do to the economy...?

Are fuel prices closely related to energy prices?
Why has fuel cost started to come down?

And how can a simple person like me understand where the UK sits in relation to other countries in terms of pure energy pricing ( excluding any governmental input)? In theory, similar countries would face a similar energy price increase. Some might use a buffer so the end user isn't as much affected as in the UK.

All I understand right now is that I'm paying for the following energy and fuel consumption: my own, manufacturing, delivery and point of sale for various goods that I purchase.

For those asking how energy companies can be making large profits and also struggling, there are two aspects to the business. For electricity, as an example:

1. there are large energy generating companies. These companies feed electricity into the network. This energy is sold to the energy companies that supply us. The ones we buy from bid for the energy, trying to guess how much electricity their customers will use at any time, and trying buy at the lowest price, if they estimate the amount they need incorrectly, they buy more from a central supplier who charges over the usual rate. If they need less than they need from the central supplier, they are forced to sell it back at less than the market rate. There is no cap on the market rate that the large energy companies charge. If there is a shortage, the amount that the buyers bid goes up.

2. the smaller energy companies are those that buy from the big energy companies and sell to us. As noted above, there is no cap on their costs, but there is a cap on what they can charge to us. In the past, almost all of these companies were the same company (or at least same group) as the big energy suppliers, so the bidding process wasn't such an issue. A few years ago, the government wanted to increase competition, so allowed the creation of lots of new small energy companies who didn't generate their own electricity, just bought it in and sold it on. This worked well when the wholesale price was low, because they could choose to make lower margins, since there were put shareholders to keep happy. Not so good now wholesale prices are going up.

Very convenient for our politicians to blame Putin for everything.
Saying others have it worse is so helpful to freezing children and old people.

I think there will be a lot more house fires as people open up disused fireplaces and burn any old stuff in them to keep warm. If you have a fireplace that is. I think we will be using a lot more wood this year.
The energy crisis has been compounded by the country being way too reliant on foreign gas imports, should have replaced our aging nuclear power plants a lot earlier

@Butterflyfluff maybe we should do what they did in Ireland when they tried to introduce water charges- 75% just didn’t pay the bills. The water company stopped sending them out, and the Taoiseach committed to not reintroducing them again. Water bills won’t be reintroduced

They can’t cut the whole country off, so refuse to pay until they make it a reasonable price.

It's going to be hard for everyone. And by everyone, I mean everyone on the planet, not just this small isle. PP's have stated it is better in Spain, France, Germany, no it really isn't. They all have issues. France has been buying electricity from UK due to Nuclear power issues, shutdowns, and lack of cold water to cool towers. Germany relies heavily on Russia as we know, and is already cutting down on usage, it relies heavily on coal, and gas, both of which need replacing, and it shut down all its nuclear reactors post Fukishima. Norway (a big supplier to us) has had to limit supplies due to hydroelectric underperforming due to drought.

UK is doing well on offshore wind, so the government is investing, but it will take time, and of course the wind needs to blow, and in the meantime, we are all up shit creek until Russia is sorted out.

I live in a 5 bed council house. Only two left at home and one is going to university this year. So I'm hoping that will reduce my bills. Is catch 22 though. My house was adapted for me to sit my disabilities. I can't afford to pay the gas and electric increases. So I definitely can't afford to downsize (removal costs, carpet, decorating etc) . I'm lucky (?!) my mobility scheme lease ends in November so I can hand it back and use the £80ish a week to cover costs. But it means I'll be totally house bound and reliant on online shopping 100% which in turn will cost more than lidl/Aldi/local food project and make it even LESS likely that I can afford to down size in the future. Add in that I'm still on income support and will soon be swapped over to UC and that makes my financial situation even worse.

£486 a month just for ELECTRICITY!! My rent is only £398 🤷🏼‍♀️😲

The game of thrones that will immediately commence, with re-division of the production facilities between oligarch clans, is likely to push it only higher.

Prices are not going down, and the golden age of cheap energy is nearing its end. There's a limited supply of hydrocarbons on the planet. Politics, wars, economic restrictions are just a small ripple on the surface of this fact.

JSA/ESA weekly amount is £77 x 52 = £4004.

I know the £4200 is for an average family, but it won't cost a single person much less.

Majority just cannot pay it.

The oil market has cooled somewhat because the recession fears globally forced it down. A lot of this is paper trading and doesn't really reflect the tightness in supply, which OPEC+ and the US shale patch is not going to be able to offset given lack of investment.

This is the other thing to be aware of too. You can tax windfall profits, but in doing so, that means less money available to invest in replacement capacity. Technically, the oil and gas majors in the North Sea, for example, would go bankrupt if the gov't didn't subsidise the decommissioning costs of the rigs out there. All this would end up on the taxpayer's bill in the end regardless.

Rosehugger - How has your bill gone up by 80%? Were you on a really low tariff before the April price rise? Mine has only gone up by roughly 33%

I think you are looking at what they are charging you in summer v winter!

Was paying £175 a month up to October 2021 now £320- this will leave us about £500 in credit by October but will quickly be swallowed up by the price increase. £175 reflected our annual usage of £2,100. Current usage predicted at £3840.

The increase is actually 83%. And our usage has gone down now that we are not all at home all the time.

Add also a big hit to energy stores - in those countries that still have them - as energy usage soared across Europe in the heatwave/s this year.

@Anotherusernamethisweek

think what isn’t commonly understood is there are producers and suppliers. The producers are making lots of money - they extract the energy and sell it to suppliers - currently at extremely high rates. The suppliers - the companies that supply energy to your home - are not (many making losses, many more might go bust this year).

The government could put higher taxes on producers and use this to help out customers, for example. But a lot of people are angry at suppliers, or at ofgem, and the problem is actually with producers and the wholesale market.

£4200 is more than a single person on benefits gets to live on in a year!!

What is going to happen??

Scary times.

I am very worried
I am currently paying 16.06 p per unit (electricity) and 2.80 p on gas on a fixed price deal that ends in Dec. I currently pay £260 a month and am never in credit at the end of the year
I know we are high users (13105kwh per year) but there are 6 of us in a 4 bed. The house is insulated to the rafters .
I did an online quote to see how much it would be if we were paying at the new prices now and it was £755 per month, god knows what it will be when the fixed deal ends

For the first time on records, France is no longer exporting power and is instead importing. Norway is also looking at power export curbs, meaning any European nation that hopes to pipe in extra power on a whim from France's nuclear fleet or the Norwegian hydro industry is in for a shock.

32.032p per day old standing charge. New SC of 29.292p per day

Fix to Nov 2023. This is just for gas - Exit fees of £100.00

ok thanks I might call them, although probably impossible, but system crashed when we tried to do it and not sure if change happened

You want a non-ideological reason.

If we nationalise the energy suppliers, then instead of the experts at Centrica, BP, Shell etc. negotiating for supplies of gas, LNG and oil products with the Americans, Arabs and Russians we will have Johnson, Truss, Sunak, Starmer, Reeves and Rayner and their Sir Humphrey's doing the job! Do you think they could do any better? It would also cost about £300bn to nationalise just the three companies mentioned, and I can't begin to imagine the problems trying to nationalise the Spanish, German and French owned suppliers.

The government was forced to nationalise Bulb in November 2021 after it collapsed and there were no suitable offers to take on the business. This has already cost £1.7 billion leading to an increase in domestic bills for all of us.

I did an online quote to see how much it would be if we were paying at the new prices now and it was £755 per month, god knows what it will be when the fixed deal ends

I know, if our current usage is nearly double the "price cap" then after the increases our bills will be about £7,000 a year. That's another mortgage.

I agree, It's completely unrealistic to think that people can afford to pay that much just for fuel bills, It's more than the cost of my mortgage payments! I'm so worried about my elderly mum who is already really struggling with the rising costs and whether I'll be able to support her when our own outgoings have shot up so much recently.

A single person on benefits is likely to use less than the assumptions made on usage to arrive at the £4400. Cornwall Insights used 12000kwh gas and 2900kwh electricity to arrive at that average.

Rosehugger - Have you gone on to another fixed rate deal? We were paying £129 a month for gas/electric on a fixed rate deal which finished in April 2022. We are now on the variable rate and it has gone up to £169 a month, so only a £40 difference. With that increase we are £300 in credit. Three adults in a 3 bedroom house.

Here's the Cornwall Insight forecast for fellow geeks anyone interested.

Can't you ask the council to move you to a more manageable home? I mean they probably don't have anything, but worth asking I guess. Could also ask for the warm home discount.