Hard-up Brits face £1,900 energy bills after price cap change means costs could skyrocket by almost HALF
ENERGY bills are set to skyrocket up to £1,900 as the price cap is reportedly set to be increased this week.
The steep rise - by almost half - comes as global gas prices have surged dramatically, with ministers in disagreement about how to support those most feeling the pinch.
There's been a worldwide squeeze on gas and energy supplies over the past year - meaning wholesale gas prices have risen to unprecedented levels.
Reasons behind the sharp rise include an especially cold winter last year, a windless summer hampering wind farms and an increase in demand from China.
The price cap, set by energy regulator Ofgem, could rocket to £1,897 for average users, up from its current level of £1,277.
That's an increase of 48 per cent, analysis by industry experts by Cornwall Insight has found.
The estimate falls only slightly short of the most dramatic forecasts suggesting energy bills could hit £2,000 this spring, the Telegraph reports.
Based on forecasts for the gas price from February to July, Cornwall Insight believes the price cap is likely to rise again in October - to £2,054.46.
Ministers are under growing pressure to agree on measures to help families who will be feeling the pinch from the new costs the most, according to the Telegraph.
The current leading proposal is removing VAT from energy bills, which is currently levied at five per cent.
That would save £90 a year for households on a default “standard variable” tariff - and cost the Exchequer about £2.5 billion.
Most read in The Sun
Other measures included freezing council tax and increasing the value and eligibility of existing schemes targeted at low income households, such as the Warm Home Discount.
But cutting VAT reportedly faces opposition within the Treasury as it doesn't “doesn't discriminate between the wealthier and less wealthy people”, according to an insider quoted by the Telegraph.
Another Treasury source stressed there were “drawbacks with lots of options” under examination.
In 2016, the PM told The Sun that "fuel bills will be lower for everyone" if they backed Brexit.
He said: "We believe working people will be better off if we leave the EU.
"The NHS will be stronger, class sizes smaller, and taxes lower.
";We’ll have more money to spend on our priorities, wages will be higher and fuel bills will be lower," he said.
The PM previously talked down the idea of a VAT energy bill cut when grilled by The Sun, insisting that it would be better to target those least well-off instead.