E.ON Chief Executive Michael Lewis said predictions that the annual energy price cap could rise to between £2,600 and £2,800 in October were in the ‘right ballpark’
Household bills could rise as high as £3,000 per year in fresh misery for struggling Brits, a senior energy boss has warned.
E.ON Chief Executive Michael Lewis said predictions that the annual energy price cap could rise to between £2,600 and £2,800 in October were in the “right ballpark”.
He accepted that it could be as high as £3,000 a year “if prices develop adversely”.
Mr Lewis called upon the Government to “tax those with the broadest shoulders” amid a row over whether a windfall tax should be slapped on oil and gas giants.
The price cap, which soared 54% in April so the average household now pays £1,971 a year, limits how much consumers pay for energy.
It comes after Ofgem said it would consult on whether to review the price cap every three months, which would mean bills rise and fall more often.
The regulator currently reviews the price cap in April and October, as part of efforts to curb rip-off energy tariffs.
The average household was hit by a £693 rise in their annual bill from April 1 as global energy prices soared.
There are mounting fears of another massive hike to energy bills in October when the cap is reviewed again.
Asked how much high the new energy price cap could be, Mr Lewis told the BBC : “At the moment it’s impossible to say because it depends on the development of prices over the next few months. We are still in what’s called the observation period.
“However if you look at most of the analysts, they’re predicting around £2,600 to £2,800.”
He said this sounded like it was “the right ballpark but it does depends on future pricing developments”, adding: “That’s probably not far away from where it will land.
Asked if it could be as high as £3,000, he said: “It could be – if prices develop adversely.”
Mr Lewis warned that 40% of Brits could be living in fuel poverty by the autumn without Government intervention.
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He said: “We are seeing a significant number of people in fuel poverty, that is to say more than 10% of their disposable income spent on energy, and that’s risen to around 20%, and in October our model suggests that it could rise to 40% if the Government doesn’t intervene in some way.”
Around one million of E.ON’s eight million customers in the UK are already in some kind of arrears, which Mr Lewis says they expect to rise by 50% come October.
He also said that an increase in Universal Credit would “absolutely” help “people at the bottom of the income range who are most adversely affected by this”.
Mr Lewis said the “scale of this is simply too big for us to manage” when asked if E.ON could do more to help customers.
He was pressed on why the company couldn’t do more after bumper profits of £6.6 billion last year.
He said: “The most important thing to say about that number is that covers our whole group. We are active in 13 different countries.”
Mr Lewis said the firm lost nearly £1 billion in the UK over the last three years and it made £20 per customer.
Asked whether the firm had a responsibility to do more, he said: “Our responsibility is to serve our customers as well as we possibly can and that’s absolutely what we do.”
Shadow Chancellor Rachel Reeves said: “These comments underline how tough the cost-of-living crisis is for families, and how Conservative delays will see the situation get even worse.
“The Government must act now, by bringing in a windfall tax on oil and gas producer profits to cut bills.”