Squeeze on households could tighten as gas prices soar 70% to record high

Household energy bills could rise even further after gas prices soared by more than 70% to hit a new all-time high as fears over supplies from Russia continued to rock the market.

Prices are now more than 20 times higher than they were just two years ago, increasing on Monday from what were already record highs last week.

The price of a therm of gas, the commonly used measure, shot up to around 800p during the morning. It had been at around 460p on Friday.

The price later fell back from that record high and was trading at around 590p a little before midday on Monday.

It is likely to lead to an even bigger squeeze on households. Energy prices are set to increase by more than 50% to close to £2,000 for the average household on April 1.

Already last week, when gas was trading at much lower levels than on Monday, experts predicted the price cap will rise by around £1,000 to more than £2,900 in October when it is next changed.

However, the rise could come sooner if industry regulator Ofgem decides the market cannot handle the pressure.

Earlier this year the watchdog gave itself new powers to step in between price cap periods to adjust the amount that suppliers can charge.

It came as the price of oil also surged to its highest for 14 years after Washington revealed it is in talks with European allies over banning imports of Russian oil.

The prices of both commodities have shot up since Russian President Vladimir Putin ordered an unprovoked full-scale invasion of Ukraine less than two weeks ago.

The EU relied on Russia for around 46% of its gas and around a quarter of its oil in the first part of last year.

So far European and US sanctions have not directly targeted Russia’s energy exports – which prop up the country’s economy – because of fears of the knock-on effects.

The UK is less reliant on Russian imports than many countries on the Continent, but prices here tend to track those in Europe.