Rising Energy Prices Hit British Households as Igloo Hikes Bills
(Bloomberg) -- U.K. energy retailer Igloo Energy Supply Ltd will raise its prices for the second time this summer to try and cope with the surging price of natural gas.
It’s the latest example of global energy inflation hitting consumers just as economies are opening up after restrictions to contain the spread of the coronavirus. In the U.K., millions of households are set to see higher bills this winter after the energy market regulator raised a cap on prices to account for the higher cost of gas.
U.K. gas prices climbed to a record on Tuesday while day-ahead power prices have surged recently to an average of about 107 pounds ($147.08) per megawatt hour during August, up from an average of about 37 pounds a year earlier, according to exchange data.
One of the country’s largest retailers, Electricite de France SA, already said it would raise bills for some of its customers in line with the regulator’s change.
Smaller utilities that have not hedged to protect themselves against rising wholesale costs could be poised to go out of business, Chris O’Shea, chief executive officer of Centrica Plc, the U.K.’s largest energy supplier warned last month.
Centrica CEO Predicts More Energy Supplier Failures by Next Year
“Across a rising commodity market environment, we see hedging by larger suppliers as effective to avoid further cost pass-throughs to customers,” analysts at RBC Europe Ltd said in a note. “We believe smaller energy suppliers in the U.K. will be less well placed heading into winter months, where we expect power and gas prices to remain elevated, given smaller suppliers limited hedging abilities.”
Hub Energy, a gas and electricity supplier with around 6,000 domestic customers, and 9,000 non-domestic customers, announced it was exiting the market on August 9.
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