What does action over Russian oil and gas mean for UK consumers?
The UK’s announcement that it will phase out Russian oil imports by the end of the year is set to have an impact on consumers already feeling the pain from surging inflation and high energy and fuel bills.
The government also said it was exploring options to end Russian supplies of natural gas to the UK, which make up less than 4% of the country’s supply.
Here’s what the UK’s move to replace the 8% of Russian oil could do to bills:
Household energy bills are already set to go up in April, and the new move could mean bigger rises are set to come later in the year, by putting more pressure on oil and gas prices. Brent crude jumped to $133 per barrel on Tuesday, close to the 14-year high hit on Monday. The good news of sorts for households with standard gas and electricity supplies is that the Ofgem energy price cap that applies to bills stops providers from putting up variable tariffs any time soon. The higher price cap that takes effect on 1 April will be in place until the end of September.
The cap will be updated in August, with the new ceiling taking effect from the start of October – so a lot will depend on the state of the energy market at that point. Some experts had already suggested that average annual bills could go reach £3,000, and this latest announcement heightens the chance of that happening.
Even if the wholesale cost of gas has gone down by the summer, in the shorter term rising prices will put pressure on suppliers. If more go to the wall, there could be greater costs in the pipeline for customers. Standing charges for electricity are going up by around 80% in some cases in April to cover the cost of last year’s energy company collapses, and if more go bust, the cost of looking after their customers will
Read more on theguardian.com
