The crisis in Afghanistan and energy prices in the UK?

The crisis in Afghanistan has been an ongoing issue for the world and with the latest victory of the Talibans, there is no doubt that the Western world will feel the economic consequences of it.

The situation in Afghanistan does have the potential to affect the oil and gas prices, but the real impact is not clear yet. At the moment, the global nations are being very careful with the way they approach this crisis and the Talibans, especially the oil-producing nations. Countries such as India and Iraq are already experiencing a big  increase in fuel prices.

New record prices of petrol and energy
Soon, Europe might also experience rising prices of energy, an issue that has been continuing over the past months in the UK. Recently, the petrol prices in England have reached their record level since 2013 as there is an increasing demand for fuel, while economies recover from Covid-19.

In July the petrol price increased with 3.4p per litre. This is the biggest increase in price since the month of January and the ninth monthly rise in a row. As a result, the average price of a litre of unleaded to 135.13p, the highest seen since September 2013.

According to an analysis performed by Imperial College London, in August the electricity market price passed the £100/MWh for the first time since the market was established back in 1990. The average market price reached £107.50/MWh in July, which represents a 14% increase. This is more than the previous all time high of £96/MWh, recorded in the run-up to the 2008 global financial crisis.

More English households to face fuel poverty

At the same time, the UK is expecting the new and increased Energy Price Cap to become active on the 1st of October. Household energy bills are to rise after prices on the UK’s electricity market went up to a record high last month, building concerns about more families to face fuel poverty this winter. According to the government, there were around 3.18 million households in fuel poverty in 2019. Due to the Covid-19 crisis, many households are left with lower income. This makes it even harder for them to keep up with the ongoing increase in energy prices. Therefore, the percentage of households in fuel poverty is expected to show an increase in 2021.