Energy Price Guarantee stays put for April

Energy Price Guarantee set to remain stable in April

According to the BBC, the chancellor is anticipated to extend the Energy Price Guarantee for an additional three months at present rates.

There have been demands for the government to maintain its current level of support with the cap at £2,500 despite plans for the average household energy bill to increase to £3,000 per year starting in April.

The amount of assistance is currently anticipated to be maintained, but energy companies have been urged to plan for both outcomes.

April energy prices to hold steady under Price Guarantee

Treasury officials declined to respond.

The average household cost is currently restricted by the government to £2,500 per year, plus a £400 winter discount.

The help is expected to be reduced starting on April 1, and the £400 discount will stop, which could cause people’s bills to increase even though the weather is growing warmer.

Campaigners against fuel poverty claim that as a consequence of the April increase, the number of households having trouble paying their bills could increase from 6.7 million to 8.4 million.

The BBC was informed by industry sources, however, that some energy firms have already begun amending upcoming bills to reflect the fact that energy assistance will remain at or very close to current levels after 1 April.

Finance issues

The support has not yet been extended by Chancellor Jeremy Hunt at the present rate, but experts say it is more likely than not that he will do so at the Budget on March 15.

Last month, Mr Hunt informed the BBC that the strategy was “under review”.

An open-ended commitment, according to the Treasury, would considerably expose British public finances to any additional unanticipated increases in gas prices on the global market.

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Instead, because it is already expected that the separate energy price limit will be lower due to falling market gas prices, the decline in support will begin in the summer, when it will not be necessary.

However, it appears probable that the £400 winter payment, which resulted in a £66 monthly payment reduction on many bills, will come to an end the following month.

There haven’t been any discussions about expanding this type of assistance.

Martin Lewis, an advocate for consumer rights, the Resolution Foundation, a think firm that works to raise living standards for low- to middle-income earners, and opposition parties have all urged Mr Hunt to reverse the bill increase.

Families are very concerned about prices increasing in April, so it’s critical that the government reassures them now and extends the windfall tax on oil and gas giants to provide them with support for their energy expenses as Labour would.

The Treasury could afford to maintain support at current levels until the summer, according to a forecast by the economic research agency Institute for Fiscal Studies (IFS), because wholesale energy prices significantly declined, lowering the cost of the program.

Energy UK, which represents suppliers, asked the government earlier this week to keep the amount of help for a typical family at £2,500 and to “announce that quickly” so that businesses could add it to bills starting in April.

Grant Shapps, who is in charge of energy, recently said that he understands “very well” why people want to stop the expected £500 increase in bills.

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An alternative viewpoint contends that government spending would be better utilized if it focused on providing assistance to those with the lowest incomes during the cold and cost of living payments.

“This additional money could have a significant positive impact on vulnerable groups if it were applied more strategically. And should those organizations receive more money than billionaires and homeowners who receive payments on a universal basis?” Joe Malinowski, the creator of the comparative website Energyscanner, said.

Prices for commercial gas and electricity have decreased recently, which has sparked optimism that the worst of the energy crisis may be passing.

As Covid lockdowns stopped, bills started to rise, but the Ukrainian war caused them to rise even more.

A typical household’s gas and electricity bill would have reached £4,279 annually starting in January under the energy price cap established by Ofgem, the industry regulator, without the government’s Energy Price Guarantee to restrain prices.

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