Domestic electricity prices increased by 17% in the first three months of 2022 in comparison with the same period in 2021, according to new statistics from the Department of Business, Energy and Industrial Strategy (BEIS).

Meanwhile domestic gas prices increased by 26%, so that all domestic fuels increased by 21% in real terms, accounting for inflation in the first quarter of 2022 (Q1).

Similarly, the average price for electricity in the manufacturing industry was 17.15 pence per kWh in Q1, up by 8 pence per kWh (or 66 %) on January to March 2021.

The price for gas during this period was 4.62 pence per kWh, more than double that of the same period the previous year, rising 162% from 2.9 pence per kWh.

As such it is no surprise that energy prices are now the biggest concern for businesses, according to a recent report from npower Business Solution, which suggested 77% of businesses put energy costs as their biggest concern followed by 72% identifying the ongoing recovery from Covid-19.

Although the year-on-year comparison shows significant increases in power prices, they were actually slightly lower than in the previous quarter, with the electricity price 1.4% lower in Q1 than Q4 2021, and gas 1.6% lower.

The surging power prices follow international gas prices hitting record highs over the final half of 2021 and into the beginning of 2021.

Consumers were largely protected from the impact of this over the winter due to the price cap, but the combined high wholesale prices and the inability to recoup the higher costs due to the price cap was a significant factor in the failure of 28 energy suppliers between September and now.

In April, the price cap jumped by 54% to £1,971 in response to the high wholesale costs. Since then, the Russian invasion of Ukraine has increased energy price volatility, and spurred concerns around energy security.

For example, gas prices recently climbed again in response to the latest wholesale market uncertainty driven by flows to Continental Europe markets from Russia. There have been reductions in gas deliveries to Germany, Italy and Austria, among others.

This has led to consultancy Cornwall Insight updating its forecast for the upcoming winter price cap period, raising it to nearly £3,000 – a jump of over 50% on the summer price cap – as geopolitical barriers show “no sign of abating”.

To stay up to date with power prices in the UK, read Current±’s Price Watch series – powered by LCP Enact – every Monday, as we track day ahead, intraday and imbalance prices and what is driving them.