Ofgem Raises Energy Price Cap by 80 Percent

Over the past several days, energy prices in Europe have set new records, with gas futures exceeding $3,300 per thousand cubic meters for the first time since March, growing by more than 10%.

The Office of Gas and Electricity Markets (Ofgem) lifted Britain's energy price cap on Friday amid soaring prices.

The regulatory authority stated that the new cap, which comes into power in October, will be £3,549 (around $4,189), while the old one amounted to £1,971 ($2,326). This is not the first time the price cap has risen for Britons - back in April, it also posted a significant leap, adding 54%.

Addressing the rising prices, Chancellor Nadhim Zahawi said that the cabinet is "working flat out" to "develop options for the further support" of the consumers.

Ofgem CEO Jonathan Brearley said that resolving the crisis is beyond the regulator's power, and urged the British government to address skyrocketing prices and inflation.

"The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year. We are working with ministers, consumer groups and industry on a set of options for the incoming Prime Minister that will require urgent action.The response will need to match the scale of the crisis we have before us. With the right support in place and with regulator, government, industry and consumers working together, we can find a way through this", he said.

The raising of the price cap comes amid an escalating crisis in the UK, as spiking costs of living have forced millions of Britons to drastically cut their expenses. The situation remains tense as inflation hit a 40-year high of 9.4% in June, grocery inflation reached 11.6 percent.

Shifting the Blame

Brearley blamed Russia for the sharp spike in energy costs, claiming that Moscow "deliberately turned off the gas supplies to Europe", driving the price up and that the UK authority had "no choice but to reflect these cost increases".

European countries have repeatedly claimed that Russia is to blame for the skyrocketing gas prices, despite the fact that their own restrictions against Moscow caused delivery issues for gas, coal, and other sources of energy, resulting in record prices.

Russian gas giant Gazprom previously had to stop gas flows via Nord Stream since a gas turbine for the pipeline was stuck in Canada due to anti-Russian sanctions. After a pause, Ottawa sent the crucial piece to Germany, allowing the flow to continue.

The Nord Stream gas pipeline in the German town of Lubmin.

© Sputnik / Grigory Sysoev

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However, this week the company announced it would have to stop delivering gas once again, starting from 31 August, for three days of maintenance work.

At the same time, the sanctions, which were imposed on Moscow after the start of the special military operation in Ukraine, made Russia change the terms of payments for gas: in March, President Vladimir Putin signed a decree which stipulates that gas would be sold to the "unfriendly countries" for Russian rubles.

Several European nations refused to pay in rubles, and Moscow terminated gas supplies to the said nations for violations of the conditions of gas withdrawal.