Fears energy bills could rise higher as gas prices hit new high amid Russia's invasion of Ukraine

The cost of living cases has deepened as energy, fuel and food prices soar. Credit: PA

Gas prices have soared 70% over the past two years to hit record highs, but there are concerns household energy bills could rise even further, as fears over supplies from Russia continued to rock the market.

Prices are now more than 20 times higher than they were in 2020, with the cost of a therm of gas, the commonly used measure, rising to around 800p during the morning. It had been at around 460p on Friday.

The price, however, did later fall back from that record high to trade at around 590p a little before midday on Monday.

It is likely to lead to an even bigger squeeze on households already facing soaring energy bills and rising taxes at a time of inflation.

Energy prices are set to increase by more than 50% to close to £2,000 for the average household on April 1.

Already last week, when gas was trading at much lower levels than on Monday, experts predicted the price cap will rise by around £1,000 to more than £2,900 in October when it is next changed.

The prices of oil and gas have shot up since Russian President Vladimir Putin ordered an unprovoked full-scale invasion of Ukraine 12 days ago.

The EU relied on Russia for more than 40% of its gas and around a quarter of its oil in the first part of last year.

A tanker loads its cargo of liquefied natural gas from the Sakhalin-2 project in the port of Prigorodnoye, Russia. Credit: AP

So far European and US sanctions have not directly targeted Russia’s energy exports – which prop up the country’s economy – because of fears of the knock-on effects.

During a Downing Street press conference on Monday, Mark Rutte, the Dutch prime minister, said there would be a “painful reality” as countries look to move away from Russian energy dependency.

“It would basically undermine supply chains the world over, particularly in Europe. It would also have an impact on Ukraine itself," Mr Rutte said, as he warned that forcing companies to stop trading with Russia would have "enormous consequences".

Boris Johnson said the focus should now be on an accelerated push to find alternative energy sources, even though the UK is less reliant on Russian imports than many countries in Europe.

“You can’t simply close down use of oil and gas overnight, even from Russia – that’s obviously not something every country around the world can do," he told the press conference.