Energy price cap rise will cause 'real hardship' says boss of Eastleigh provider
The CEO of a Hampshire based energy provider says the new price cap coming into effect in April will mean 'real hardship' for people.
Energy regulator Ofgem confirmed the price cap will rise by 54% from April 1, affecting around 22 million customers.
Bill Bullen, CEO of Utilita in Eastleigh said the real effect on customers will be felt towards the end of 2022.
He said, "The only saving grace of having these high energy prices in April, is that we're going into the summer, and our energy costs are going to fall because it's summer.
"This problem is going to really hit home for an awful lot of families in October, with the next winter coming up.
"We're going to see genuine hardship.
"Offering nearly everyone £350, is not the right way to address this problem, because for those lowest income households, they are already struggling.
"So adding even half of this increase onto their energy bills, the impact on their expenditure at that time will be enormous.
One of the measures Chancellor Rishi Sunak announced to help households was a £200 rebate on energy bills, which will have to be paid back.
CEO of Utilita Bill Bullen reacts to the £200 rebate
Inflation is set to hit an eye-watering 7.25% in April, according to new Bank of England forecasts released on Thursday.
The prediction would mean that disposable incomes would fall by around 2%, according to Bank estimates, the worst impact since records began in 1990.
Bill added, "Inflation rising to around 7%, is if you have an average expenditure.
"If the vast majority of your income is going on your energy bills, your inflation rate is more like 50%.
"Those are the differences I don't think the government have fully appreciated.
Utilita which was founded in 2003, offering pay as you go energy. The company currently has around 800,000 energy customers.
The firm say the lower income households will be badly hit by the price hike, and that the only long-term solution to the problem is being able to cut the dependancy on imported hydrocarbons.
"You need to help people become more energy efficient in their use of energy.
"That's where the focus of attention needs to be. The UK has done well at developing renewable energy sources, but we need to do more of it.
"Where we've not done well at all, is we are still building house with heating standards at the right level.
"Also more and more people are using smart meters which give you the opportunity to understand your energy consumption. They can give you ways in which you can reduce your own carbon footprint, but it's not mandated which is frustrating."
What support has Rishi Sunak announced to help with soaring bills?
The energy price cap is rising - here's what that means for you