According to the CEO of an energy company, prices may climb this winter.
Energy prices may rise this winter, forcing governments to step in and subsidize bills once more, according to the president of the International Energy Agency.
If the Chinese economy grows swiftly and there is a bad winter, gas costs may climb, putting pressure on consumers, according to Fatih Birol.
He also stated that governments should promote energy conservation and renewable energy.
However, a UK government official stated that annual energy bills will be reduced by an average of £430 this month.
Following Russia’s invasion of Ukraine, gas prices skyrocketed, forcing increasing energy expenses around the world.
A number of countries then moved in to provide assistance to homes, notably the United Kingdom, in an attempt to lessen the impact to consumers.
The International Energy Agency (IEA) collaborates with governments and business to offer data, analysis, and policy recommendations.
Mr Birol told the BBC’s Today programme that many European countries made “strategic mistakes,” including over-reliance on Russia for energy, and that short-term business decisions have “blindfolded” foreign policy.
This winter, he warned, “we cannot rule out” another surge in gas prices.
“In a scenario where the Chinese economy is very strong, buys a lot of energy from markets, and we have a harsh winter,” he said, “we may see strong upward pressure on natural gas prices, which will put an extra burden on consumers.”
The owner of British Gas fears that energy bills will remain high.
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The Chinese economy had been rebounding back when Covid restrictions were eased, but it has recently slowed.
S&P Global lowered its prediction for Chinese growth this week, stating “the risk is that its recovery loses more steam amid weak consumer and housing market confidence.”
Investment firms such as Goldman Sachs have also reduced their predictions for Chinese growth.
Nonetheless, Mr. Birol stated that nations, including the United Kingdom, should “continue to push measures to save energy, especially as we enter winter.”
They should also encourage renewable technology to “see the light of day as soon as possible” and shorten the time it takes to obtain licenses, as well as explore for “alternative energy options,” he said.
He stated that he “wouldn’t rule out blackouts” as “part of the game” this winter.
“We do not yet know how strongly the Chinese economy will rebound,” he remarked.
Last winter, National Grid warned of the risk of short power outages; nevertheless, this was not necessary.
“We spent billions to protect families when prices rose over winter, covering nearly half of a typical household’s energy bill, with prices set to fall by around £430 on average from this month,” a UK government spokesperson said.
Domestic gas and electricity rates in the United Kingdom decreased over the weekend as a revision to the energy price cap took effect, and another, smaller drop is predicted this winter.
However, with an annual energy expenditure of around £2,000 for the average home, costs are still significantly higher than the pre-pandemic norm.
Last Monday, the CEO of Centrica, which owns British Gas, warned that energy prices will remain high for the foreseeable future.