Energy bills could soar by one third for millions of households this spring as natural gas prices continue to rise.
Experts forecast that the energy price cap will be permitted to rise by an additional £400 when it is next reviewed in February.
The End Fuel Poverty Coalition said last week that one in five households risk being forced into fuel poverty this winter.
This news comes amidst rising concerns regarding the cost of living in the UK as the £20 uplift to Universal Credit ends, the National Insurance hike is set to come into effect next April and inflation continues to rise.
The record jump would come on top of the 12 per cent increase introduced on 1 October.
12 energy firms have gone bust since January 2021 and more are expected to fold due to their inability to absorb record prices while consumers are partly protected via the price cap.
Any costs resulting from suppliers going bust are borne by consumers through a levy recovered through their bills, which could hit over £3 billion.
On Wednesday, the price of natural gas for next-day delivery in the UK hit 400p per therm before falling back to 256p.
Prices stabilised after Reuters reported that Russian President Vladimir Putin said Russia is boosting gas supplies to Europe.
EU politicians have claimed the Kremlin are withholding gas supplies to exert pressure as it awaits regulatory approval for the Nord Stream 2 pipeline project, which would double its capacity to export gas to Germany.
A cold winter in 2020 left Europe’s natural gas stocks low, and a less windy summer than usual meant reduced generation from renewables.
The issue has been exacerbated by lower-than-expected Russian gas supplies and increased demand across Asia.
Power outages have already been imposed on factories in northeast China, and it is thought the industry could take a similar hit across Europe as a difficult winter looms.
Labour MP Richard Burgon said via Twitter:”3.7 million households were in fuel poverty, even before the latest energy price hikes. 500,000 more families are set to be pushed into fuel poverty due to the latest price cap rise. Our energy system is broken. It’s time to bring it into public ownership.”
Conservative MP John Redwood also commented on the news, writing: “It is not green to close our energy-intensive industries down, only to import fossil fuel-based products from less green countries. The UK needs to produce more of our own gas to relieve shortages. That means licences and tax changes.”