Gas energy costs have seen a huge price hike due to a high demand and a shortage in supply. Customers are supposed to be protected by a sudden rise in wholesale gap prices through an energy price cap, however, Martin Lewis, founder of the Money Saving Expert website, has claimed “it is a false name” and “there’s no absolute cap on the amount that you pay”.
During an interview on ITV’s Good Morning Britain, Martin Lewis condemned the price hike in gas energy bills as “catastrophic”, while highlighting that the huge rise in costs would be “unaffordable for most people”.
“We’re going to need some bigger intervention in the market to stop people having the choice between heating and eating,” he said.
Customers are supposed to be protected by a gas price hike, however Martin claimed the term price cap was a “false name”.
“It’s actually a rate cap,” he said. “There’s no absolute cap on the amount that you pay.”
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The increase in costs have left some companies unable to provide energy, despite customers already having paid for the service.
The gas price hike comes after an energy bill increase in October which saw costs rise by 12 percent.
Reflecting on the Government’s assurances that a price cap on energy bills would remain, Martin claimed there was “no absolute cap on the amount that you pay”.
He explained that £1,130 was the typical usage, but a larger consumption of energy would mean the price cap would be higher and increase to £1,277, which would be a 12 percent rise.
“It’s always the ceiling of what people would pay,” but would now be the “floor of what people will pay,” he said.
He urged people to visit online price comparison sites, adding “do it quickly to try and get a fix”.
He said the price cap is expected to be reviewed in April.
Martin added: “We’ll already in the period where they assess what the rates will have to be in April, and it looks as if it’s going to jump next April to £1,500 or more for the price cap.”
Yesterday in the House of Commons, Business and Energy secretary, Kwasi Kwarteng, assured the country that the government “do not expect supply emergencies to occur this winter”.
He said Britain had benefited from a “diverse range” of gas supply sources and added that capacity was “more than sufficient” to meet demand.