LONDON, May 19 (Xinhua) -- The price cap on British household energy bills is forecast to rise by 13 percent from July, as higher wholesale energy prices caused by the Middle East conflict feed through to consumers, energy consultancy Cornwall Insight said on Tuesday.
Cornwall Insight said its final forecast for the July-September cap showed that a typical dual-fuel household would face an annual bill of 1,850 pounds (about 2,479 U.S. dollars), up from the current 1,641 pounds.
The consultancy said wholesale prices climbed sharply in February and March after the conflict damaged Gulf energy infrastructure and led to the closure of the Strait of Hormuz, a key route for around 20 percent of global oil and gas shipments.
Although a temporary ceasefire later brought some calm to markets, wholesale prices remained elevated throughout the observation period, keeping pressure on the July forecast, Cornwall Insight said.
Craig Lowrey, principal consultant at Cornwall Insight, said the increase will take effect during the summer, when households normally use less energy, especially for heating. That means the immediate impact on consumers is likely to be less severe than it would be in colder months.
However, the consultancy warned that the bigger concern would come in October, when household energy demand usually rises again. Current forecasts suggest the price cap could remain at a similar level in the autumn.
"A summer rise will be painful for households, but the bigger concern is October when household demand traditionally picks up," Lowrey said.
If the cap remains near the July level in October, the government will need to consider targeted support for the most vulnerable households, he said.
Cornwall Insight said a sharp fall back to April's price cap level looked unlikely even if the Middle East conflict ended soon, citing damage to energy infrastructure and the lingering impact of supply disruptions.
Britain's reliance on imported liquefied natural gas had made the country vulnerable to global price shocks, Lowrey said
"As a net importer of liquefied natural gas, global price shocks have hit us hard, and that vulnerability isn't going away," he said.
He said short-term support could help protect vulnerable households, but it would not solve the deeper problem. Government proposals to weaken the link between electricity prices and gas prices could make some difference over time, but consumers were unlikely to see a major immediate change because gas would still often set electricity prices.
"Building out our renewable capacity is the only real path to bills that aren't as exposed to events thousands of miles away. It won't be cheap, and bills will not see an immediate drop, but that is the direction of travel if we want genuine, lasting stability," Lowrey said. ■