The United Kingdom's newly elected Prime Minister Liz Truss on Thursday, 8 September, announced that the typical household energy bill in the UK will be capped at £2,500 per year, for the next two years.
"From 1 October, a typical household will pay no more than £2,500 per year, for each of the next two years, while we get the energy markets back on track," Truss told the UK Parliament.
"This will save a typical household, £1,000 a year based," Truss added. The move is in addition to the £400 payment to households set out by former chancellor and Tory leadership contender Rishi Sunak earlier this year.
The announcement comes as a relief to UK citizens before the winters, when the energy price cap is due to rise from £1,971 to £3,549 in October, reported BBC.
Global energy prices are also increasing in the wake of the Russia-Ukraine war.
The report further added that according to experts and charities, the soaring energy bills could have led to people struggling to afford basic day-to-day living costs.
"We are supporting this country through this winter and next, and tackling the root causes of high prices so we are never in the same position again," Truss said.
"This is the moment to be bold, we are facing a global energy crisis, and there are no cost-free options," she added.
Support Scheme for Businesses in the UK
In addition to capping household energy bills, Truss also announced that there will be a six-month scheme for businesses which will provide "equivalent" support, BBC reported.
There is currently no cap on energy costs for businesses and a specific figure on the support has not been given due to differences in how the wholesale energy market operates compared to the retail market for households.
Truss further added that the government would accelerate domestic energy production, lifting a ban on fracking for shale gas and offering more licences for oil and gas production.
The Opposition Labour Party argued that a freeze on bills should be paid for through a windfall tax on the profits of oil and gas producers instead, something the new prime minister has been against throughout her leadership campaign to be elected Conservative Party leader.
While talking about the same, Truss said that it “would discourage the very investment we need to secure home grown energy supplies," The Guardian reported.
(With inputs from BBC, The Guardian, and PTI.)