Fuel Poverty Grows

With another increase in gas prices, more households are finding it harder to afford to heat their homes.  Five out of the six leading companies have increased residential energy prices by approximately 15% already this year, and yesterday Ofgem announced they will be launching an investigation into the way in which the market is functioning.  They intend to take a closer look at the retail market and how this is influenced by the global wholesale market developments.

The debate has been fuelled by the revelation that Centrica, the energy group of which British Gas is a subsidiary experienced a significant increase in profits last year.  The operating profit last year was £571m in comparison with £95, in 2006. 

These increasing prices for central heating will bring difficulties for many households, in affording their bills this winter, meaning more people will suffer from fuel poverty. 

What is fuel poverty?

This is defined as a household that spends more than 10% of income on the energy required to maintain health and comfort.  However, over 4m have to spend at least 10% of their disposable income on heating and lighting. 

One in six British households is living in fuel poverty, which illustrates the challenge the government faces to eradicate fuel poverty for all vulnerable and low income groups by 2010 and all other households by 2016. 
Director Chris Jones commented:

“We are concerned at the amount of people who find themselves in a ‘heat or eat’ situation, and hope that more is done to counter this.  We recommend that householders review their heating systems, checking for efficiency and to investigate replacing old heating systems with energy efficient heating systems for which there are numerous grants available.”

Old central heating boilers can sometimes run at a mere 40% efficiency, so savings can certainly be made if they are replaced rather than repaired.  Other tips on how to make energy savings – and therefore cost savings can be viewed in our article Energy Use in homes.

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