Ovo chief: The government needs to be more aggressive in addressing energy costs

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One energy boss told BBC that the government does not show enough urgency in trying to find a way out of steep rises in electricity and gas prices.

Stephen Fitzpatrick of Ovo predicts that wholesale gas prices will rise and the impact it has on individuals, “an enormous crisis in 2022”.

The business secretary will later meet with regulator Ofgem, and representatives of energy firms.

According to the government, it is committed to protecting consumers.

Fitzpatrick stated that the biggest concern was about how price rises would support consumers.

“We’ve been watching this energy crisis for three months now and have watched as prices of energy spike, drop back, then rise again,” he stated.

We’ve seen more than 30 sector bankruptcies, and millions of customers have been forced to switch suppliers.

“The cost to the consumer has already been more than £4bn. The government and regulator have not taken any actions. He said that while there is acceptance of the problem, it’s not urgent enough to solve it.

He highlighted the example given by some European countries that helped their consumers.

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Wholesale gas prices have increased to new heights in recent months. Last week, they hit a new record of 450p per therm, which experts think could take average annual gas bills to around £2,000 next year.

Energy UK, an industry trade association, said Thursday that bills could rise by 50% more unless government intervention is taken.

Since wholesale prices began to rise, more than 20 energy companies collapsed. They were unable to either pay the high costs or pass on increased costs to customers. Nearly four millions of customers are affected.

The comments of Mr Fitzpatrick come before Monday’s meeting between Kwasi Kwarteng (Business Secretary) and top executives from leading energy companies as well as regulator Ofgem.

Ofgem has set a price limit to protect consumers from large increases in wholesale prices. The cap will be subject to adjustment in April.

Labour has urged the government to make use of the VAT revenue that was higher than anticipated, owing to the rising cost of food, and higher energy prices to reduce household energy costs.

Rachel Reeves, shadow chancellor of Labour, said that Labour would like the government to announce immediately the elimination VAT on household heating bills during winter.

She said, “We need an ambitious and sustainable approach to our energy.”

The government stated that it regularly interacts with the industry. It also said, “We will continue to ensure consumers are protected by the Energy Price Cap.” This is an insulation measure for millions against record-breaking global gas prices.

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Source: BBC.com

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