UK gas prices fall from record high after Russia steps in
UK wholesale gas prices hit a record high before falling after Russia said it was boosting supplies to Europe.
Russia President Vladimir Putin appeared to calm the market after gas prices had risen by 37% in 24 hours to trade at 400p per therm on Wednesday.
UK gas was 60p per therm at the start of the year, but high global demand and reduced supply has driven prices up.
The high cost of wholesale gas has seen several UK energy firms collapse and halted production across industries.
Following Mr Putin's comments on supplies, gas prices dropped to about 257p a therm later on Wednesday.
"We have already seen the impact of the truly astronomical increases in energy costs on production in the fertiliser and steel sectors," said Richard Leese, chairman of the Energy Intensive Users Group.
Firms go under
Besides industry struggles, a total of nine energy suppliers have collapsed in recent weeks, which has affected nearly 1.73 million customers in September alone.
The companies that have gone bust have been mostly smaller firms, which have been unable to deliver price promises to customers because of the surge in gas prices.
Customers face higher bills
Jonathan Brearley, the boss of Ofgem, has warned that the cost of protecting customers from failing energy providers could lead to higher bills.
A higher energy price cap came into force on Friday, with those on standard tariffs, with typical household levels of energy use, seeing bills go up by £139 to £1,277 a year.
Customers are protected from sudden hikes in gas prices through the energy price cap, which sets maximum prices and charges for those on a standard or default tariff.
However, the next revision of the cap, which will affect bills from the start of April, is likely to rise significantly to reflect the greater costs faced by suppliers.
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