(Bloomberg) -- UK Prime Minister Boris Johnson suggested the nation’s energy markets could be overhauled in a bid to ease surging prices that have left many British households facing so-called fuel poverty.
Much of the UK’s electricity is powered by natural gas, and the price that consumers pay is tied to the so-called marginal gas price, Johnson said in a radio interview with BBC 4. Changing that system could ease prices, he said.
“People are being charged for their electricity prices on the basis of the top marginal gas price, and that is frankly ludicrous,” said Johnson.
“We need to get rid of that system and we need to reform our energy markets as they have done in other European countries,” he said. “That is one of the ways, by reforming the market, by changing the way things work, you can get prices down.”
Energy costs have become a lightning rod for criticism of Johnson as surging prices impose a record squeeze on Britons’ living standards.
The nation’s deregulated power market -- the most open of any major European economy -- has convulsed since last year, with multiple operators collapsing, forcing millions of customers to transfer to other suppliers. The UK government last month announced a windfall tax on the profits of oil and gas companies that will raise £5 billion ($6.1 billion).
©2022 Bloomberg L.P.
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