This is why people in Sheffield are set for higher energy bills - and how much gas prices will rise by
Sheffield residents could end up paying up to £400 more on their energy bills as gas prices continue to rise.
Research agency Cornwall Insight has predicted that the energy price cap will soar by £400 in the spring, meaning people in Sheffield could be forking out hundreds of pounds extra to heat their homes.
It comes after the collapse of a number of energy suppliers and in light of a substantial hike in the cost of gas.
Here is everything you need to know about why it is happening and what it means for you.
Will my energy bills go up in Sheffield?
It looks very possible that households in Sheffield could be affected by the energy price rise, as regulator Ofgem has said millions of households across the country will be hit.
If the price cap is pushed to £1,660 in summer, it will be almost £400 higher than the current price cap of £1,277, which has been set for winter 2021-22 – which would mean a very sharp increase in bill payments.
It comes in the wake of the winter price cap which came into force at the beginning of this month, which saw energy bills rise by at least £139.
How much will energy prices rise by?
The latest price hike has seen those who pay their bills by direct debit end up with an average bill of £1,277, and pre-payment customers paying around £1,309.
If they continue to rise at the next price cap, customers in Sheffield could be paying hundreds of pounds more on top of the increase they have already seen.
Why are energy prices rising?
Craig Lowrey, senior consultant at Cornwall Insight, said: “With wholesale gas and electricity prices continuing to reach new records, successive supplier exits during September 2021 and a new level for the default tariff cap (£1,277 for a typical dual fuel direct debit customer) for Winter 2021-22, the GB energy market remains on edge for fresh volatility and further consolidation.”
It comes as the cost of gas on the wholesale market has sky-rocketed, rising more than 70 per cent since August – and more than 200 per cent since the beginning of the year.
The rise in gas prices is why energy bills are rising in Sheffield and across the country – and why nine small energy suppliers in the UK have gone bust since the start of September.
Energy regulator Ofgem reviews the price cap once every six months and changes it based on the cost that suppliers have to pay for their energy, cost of policies and operating costs.
It said: “The energy price cap covers around 15 million households and will ensure that consumers don’t pay more than is absolutely necessary this winter.
“However if global gas prices remain high, then when we update the price cap unfortunately the level would increase.”
What should I do if I can’t pay my energy bills?
If you are struggling to pay your bills or are concerned about the rising cost, Ofgem says you should contact your supplier who will be able to talk you through the range of options they have available.