• Energy Prices Could Rise Again this Winter, Warns International Energy Agency
• Retailers Accused of Pocketing Fuel Duty Cut
Consumers in the UK may face another increase in energy prices this winter, according to the head of the International Energy Agency (IEA), Fatih Birol. In an interview with the BBC’s Today program, Birol highlighted a combination of factors, including a strengthening Chinese economy and a potentially harsh winter, that could lead to further price hikes. He criticized European governments for relying too heavily on Russia for energy before the invasion of Ukraine, cautioning against short-term commercial decisions blinding foreign policy.
Birol stated that a scenario with a strong Chinese economy, high energy demand, and a severe winter could result in significant upward pressure on natural gas prices, burdening consumers. While he didn’t provide specific predictions, he emphasized that a spike in energy prices during the winter months was not out of the question.
Energy bills have recently decreased due to the lowering of the energy price cap, providing some relief to consumers. However, Birol’s warning suggests that further increases could be on the horizon, putting additional strain on bill payers.
Meanwhile Harriett Baldwin, the chair of the Treasury Select Committee, accused petrol stations and retailers of not passing on the benefit of a 5p fuel duty price cut to drivers. The fuel duty reduction, implemented in March, was intended to lower pump prices for consumers. However, an investigation found that increased profit margins offset the benefits of the tax cut, resulting in little impact on prices.
According to the Competition and Markets Authority, supermarkets and fuel retailers increased their profit margins by an average of 6p per litre between 2019 and 2022, erasing the potential savings for drivers. The inquiry also revealed that diesel margins across all fuel retailers cost drivers an additional 13p per litre in the first five months of this year.
Baldwin criticised retailers for not passing on the tax cut and suggested that the savings had gone directly to their bottom line, rather than benefiting consumers as intended. She expressed frustration that the reduction in fuel duty, aimed at easing the cost of living for families, did not seem to have been reflected in lower prices at the pump.
