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As many as half of British households may be facing fuel poverty because of the inexorable rise in energy prices, EDF, the French utility that also has business in the UK, has warned.
"When you look at the figures more than half of UK households will be in fuel poverty in January, meaning they will have to spend more than 10% of their disposable income on their energy bill," Philippe Commaret, managing director of customers at EDF told a BBC TV program, as quoted by Energy Live news.
The UK's energy market regulator Ofgem is set to announce the latest energy price cap this week, which will see electricity bills for millions of Britons rise considerably.
The price cap, aimed to protect households from excessively high bills by capping the price increases that providers can pass on to them, normally gets adjusted twice a year.
In April this year, the cap was raised by more than 50%, doubling the number of fuel-stressed households in the UK overnight. But the UK hasn't seen the worst of its cost-of-living crisis as energy bills were expected to soar by another 42% in October when the energy regulator will raise the energy price cap again.
But the adjustment looks like it would be even higher than previously expected, with the latest forecasts seeing bills topping 6,500 pounds annually for millions of households next year, all because of higher natural gas prices. This is equivalent to about $7,600 per year.
The UK imports gas from Europe, which has made it vulnerable to the effects of EU political action despite Brexit.
"The impact has been exacerbated by high electricity prices in Europe, where drought conditions have affected hydro power plants and unplanned outages have reduced French nuclear output," a senior VP from Moody's told CNBC this week in comments on the UK's energy situation.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.