Energy price limit could reach £4,000 in January, experts warn

New analysis has shown that the average energy bill is set to climb by around £4,000 annually from January as gas prices continue to move upwards.

Energy consultancy Oxilion warned that the government’s price cap, which sets the bill for more than 20 million homes in Great Britain, could be raised more than previously expected.

It said the price range for the average family between October and December is likely to be £3,488 per year. The energy bill is currently capped at £1,971 – already a record high.

But from January the price will increase by another £500, reaching £3,994, the company’s research has revealed.

The predictions for January are still uncertain as there are more than three months left for the price to be decided. The October forecast is likely to be more accurate.

Oxilion’s forecast comes less than a day after Investec analysts forecast that an October price cap would be £3,523, with bills rising to £4,210 in January.

Gas prices rose after Russian state manufacturer Gazprom claimed it was unable to take delivery of a turbine that is vital to power one of its main pipelines in Europe.

Gazprom has attributed the low flow into Germany via the Nord Stream 1 pipeline on the need for repairs. The Siemens 073 turbine has been repaired in Canada, but is currently stuck in Germany due to disputes.

The pipeline is currently running at only one-fifth of its capacity.

“With just one in six turbines currently in operation, this puts the current 20% flow rate at risk,” Auxilione said on Friday.

“Siemens Energy has said that they will ship the turbine at a moment’s notice and provide a resident engineer to maintain it.

“Gazprom has cited concerns over similar engines – numbers 072, 074 and 121 – that need a similar overhaul in the near future.”

The news adds to the nightmare scenario for families that the Bank of England determined on Thursday.

It expects consumer price index inflation – a measure of the cost of living – to reach 13.3% in October as energy bills rise. About half of inflation is directly attributable to the price of energy.