Facing the challenge of worldwide energy price rises

Professor Frank Peck considers the implications of the global energy crisis for households and businesses in Cumbria. Energy is in the news. In February 2022, the regulator Ofgem reported that electricity and gas bills for a typical household on a standard tariff will increase by £693 per annum when the price cap is raised after 1st April 2022, an increase of 54%. And this is not the end of the story as market pressures are likely to induce further increases in the autumn. The reasons for this increase have been widely reported – demand for oil and gas has risen sharply as the global economy emerges from the pandemic. Simultaneously, the amount of gas storage is at a low level and unable to meet current demand. The situation has then been worsened considerably by the impact of Russian sanctions on the wholesale price of gas; the UK obtains very little of its gas supply direct from Russia but price rises will still have major impacts on UK energy costs.