UK energy price cap seen above 3,000 pounds until 2024

Britain's cap on domestic energy prices is expected to rise by 70per cent when the next change takes place in October and is likely to remain well above 3,000 pounds ($3,660) a year until 2024, analysts said on Tuesday.

The forecasts come as oil major BP (BP.L) became the latest energy firm to post soaring profits, due largely to record high gas prices across Europe following Russia’s invasion of Ukraine and as Russia cuts gas flows to the West.

Based on latest wholesale energy prices, the cap on the most widely used household energy contracts is expected to rise around 70per cent in October, taking average annual household dual fuel bills - covering both gas and electricity - to more than 3,359 pounds, analysts at Cornwall Insights said.

The cap is expected to rise further in January, to 3,616 pounds a year, and is likely to remain well above 3,000 pounds a year until at least 2024, Cornwall said.

"Due to uncertainty over Russian gas supplies ahead of winter, these latest forecasts indicate the potential longevity of high household energy costs," Craig Lowry, Principal Consultant at Cornwall Insight, said.

British wholesale gas prices hit record highs earlier this year following Russia's Feb. 24 invasion of Ukraine, and have remained high despite falling back from their peaks.

The front-month wholesale gas price traded at 358 pence per them on Tuesday, up more than 230per cent compared with a year ago.

Britain only receives around 4per cent of its gas from Russia, but lower overall Russian supply to Europe means competition for gas is intense, pushing prices higher.

The price cap is set by energy regulator Ofgem using a formula made up of costs for suppliers' network costs and environmental and social levies, with wholesale energy prices making up the largest part at over half for the April cap level