Average British gas prices rose by more than 60% in the first quarter of 2022, according to data released by Statista, reaching a peak more than four times as large as the highest price during the previous five-year period.

This came off the back of a global recession caused by the coronavirus pandemic, adding impetus to the wave of concerns growing over the cost of living.

For those who haven’t been keeping their finger on the pulse of geopolitical and economic affairs, what factors are driving the energy crisis and what impact is it having? We’ll be exploring these questions in this short guide.

What factors are behind the energy crisis?

British reliance on international energy is the start of the problem. You see, the UK has a severely underdeveloped capacity for storing energy. Because of this, it imports a large proportion of the gas that it uses. But this means that the nation has no choice but to to international price fluctuations more keenly.

The issue was exacerbated further by the Russian invasion of Ukraine at the start of 2022. Much of the energy that comes to Britain through Europe starts its journey in Russia, which began tightening its gas supplies to Europe even before invading its western neighbour. 

The disruption caused by the ongoing war between the two countries, and the package of economic sanctions that western countries have imposed on the aggressor only added fuel to the fire. Until the turmoil in Eastern Europe is resolved or the UK establishes a stronger domestic energy supply, energy prices could remain high.

What impact is the energy crisis having?

Thanks to its dependence on energy imports, the UK has been hit particularly hard by the current energy crisis. For the average person, the energy crisis means a cruel blow to their income. Some analysts have predicted that the average monthly energy bills could be as much as 1.5 times higher later this year.

Understandably, many people are looking for alternative ways to bolster their income and cope with the additional cost. According to research conducted by Simply Business, more than 30% of Brits run their own side hustle – with mediums ranging from uber driving and waiting tables to forex spread betting done online.

What is being done about the energy crisis?

In May, the government unveiled measures worth £15 million that are designed to help households cope with the costs of energy this winter. They include targeted support for Britain’s most vulnerable groups, such as pensioners, disabled people, and those on the lowest incomes. In addition to this, a £400 grant will be available universally. 

Moreover, the government is turning to alternative sources of energy in order to bolster the UK’s supply in preparation for extreme weather later in the year. Whether this will be enough to keep Britain warm over the winter months remains to be seen.