According to the CEO of Ovo, the government needs to demonstrate more urgency when it comes to energy rates

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One energy executive said that the government is exhibiting “nowhere near enough urgency” in finding a solution to sharp hikes in gas and electricity prices.

The spike in wholesale gas costs, according to Ovo’s CEO, Stephen Fitzpatrick, will be “a tremendous issue for 2022.” On Monday, the business secretary will meet with Ofgem and the energy companies. The administration claims it is concerned about consumer protection.

With the CEOs of prominent energy firms and the regulator, Ofgem, Business Secretary Kwasi Kwarteng is due to debate recent increases in household energy prices.

Mr Fitzpatrick, who is participating in the virtual discussion, says his first aim is for the government and regulator to recognise the gravity of the problem. He expressed concern about how customers would be supported by price hikes. He explained that he’s been watching this energy crisis unfold over the past three months, as energy costs have risen, decreased, and risen again.

He cited the efforts of certain European governments to assist consumers in their respective countries. Wholesale gas prices have grown to previously unheard-of heights in recent months. They hit a new high of 450p per therm last week, which experts believe will push typical annual gas bills to almost £2,000 next year.

Energy UK, the industry’s trade association, warned on Thursday that unless the government intervened, costs might rise by another 50%.

Since wholesale prices began to rise, more than 20 energy companies have gone bankrupt, unable to pay high prices or pass the extra costs on to consumers. A total of nearly four million subscribers are affected.

A price cap set by the regulator, Ofgem, protects consumers from significant increases in wholesale costs. The cap, though, is set to change in April.

Mr Fitzpatrick stressed the importance of not wasting any more time in dealing with the rising cost of residential energy.

Labour has urged the government to use the money gained by higher-than-expected VAT receipts, which have been driven up by rising food and energy prices, to reduce household energy bills.

Labour’s shadow chancellor, Rachel Reeves, said the government should immediately announce that VAT will be removed from family heating bills this winter.