New data from the Department of Energy Security and Net Zero (DESNZ) showed that domestic electricity and gas prices increased by 10% and 28% respectively.
According to the latest Quarterly Energy Prices for the UK from April to June 2023, domestic fuel prices were 16% higher (in real terms, accounting for inflation) than the same period in 2022 as both followed similar trends.
However, domestic fuel prices within this period were 3.5% lower than prices in the preceding quarter (January to March 2023).
Real terms energy price indices in the domestic sector over the past 5 years in the UK (quarterly):
The report also revealed that fixed price tariffs remain scarcer than pre-energy crisis figures as the UK industry begins to recover from sky-high energy prices and reliance on Ofgem’s Default Tariff Cap (price cap) as a market price standard lessens.
Issues of energy suppliers using the price cap as a “de facto regulated market price” were brought to attention in a report by the Centre for Policy Studies (CPS) earlier this year. These fears were echoed by other members of the energy industry upon the announcement of the Q4 2023 price cap and concerns of households struggling to pay inflated energy bills.
Calls for the introduction of a social tariff to support the most vulnerable households with their energy bills have been growing louder of late, receiving both public and industry support.
According to Cornwall Insight, a social tariff – which has the potential to cut the energy bills of the UK’s fuel-poor households by £330 – could be delivered for approximately £1.3 billion to £1.4 billion – only 4% of the £37 billion spent by the government on the Energy Price Guarantee and the Energy Bill Support Scheme (EBSS) over the past year.
Ben Lake MP, chair of the All-Party Parliamentary Group on Fuel Poverty & Energy Efficiency, said: “The government cannot delay the introduction of a social tariff any longer. With energy debt soaring by 70% over the last three years, it’s vital that low-income and vulnerable households are protected.
“A social tariff would offer these in most need long-term security and provide much-needed relief from bills that are over 50% higher than pre-crisis. It’s time for the government to consult on these issues so a sustainable solution can be put in place.”
