UK chancellor asks Ofgem to remove standing charges from household gas bills

LONDON — Chancellor of the Exchequer John Healey will ask Ofgem to deliver the removal of standing charges from household gas bills for around 23 million homes in 2027 or as soon as possible after, the government said ahead of the Budget.

A standing charge is a fixed daily fee added to a household gas bill regardless of how much gas is used. The charges average $144 (108 pounds sterling) a year for the typical household, according to the government. It said these fixed costs would instead be paid on the unit rate, which could save 60% of account-holding households around an average of $60.00 (45 pounds sterling) off their annual bill.

"Gas standing charges are unfair and outdated so I am scrapping them to give millions of households a bit of breathing space," Healey said. The government said it would set out targeted mitigation in due course for a small number of households that do not see an automatic saving.