Prime Minister Andy Burnham has asked ministers to develop a plan removing standing charges from gas bills, fixed daily fees households pay regardless of energy use.
Standing charges vary by region and cover costs of connecting to supply networks and maintaining infrastructure. The average gas standing charge is 29.7 pence per day. Burnham directed Chancellor John Healey and Energy Secretary Miatta Fahnbulleh to examine the proposal and report back to Parliament.
Energy UK, the industry body, said whether the change would reduce bills depends on how costs are reallocated. Research foundation Nesta suggested moving standing charges to the unit rate, meaning customers pay only for what they use. Nesta director Madeleine Gabriel said this would "help those worst hit by rising energy prices."
A typical annual bill could fall by £27 under such a change, according to Nesta's estimate. Customers using little gas would likely benefit most. Heavy users could face higher bills.
The proposal carries risks for vulnerable households. Citizens Advice has warned that people on low incomes but with high energy usage could be penalized. Standing charges also fund schemes supporting low-income households, so removing them requires recouping those costs elsewhere.
Ofgem, the energy regulator, has consulted on standing charges for nearly two years and is piloting low standing charge tariffs, but has reached no firm conclusions. The regulator's cautious approach suggests the issue lacks simple solutions.
Burnham made the announcement during Prime Minister's Questions while defending the government's approval of the Jackdaw gas field in the North Sea. He said investment in renewables funded by that decision would help households, and that breaking the link between gas and electricity prices could reduce bills substantially within this parliament.
When asked why electricity standing charges were not included in the proposal, the PM's spokesman cited a previous VAT cut on electricity bills.
Energy prices are forecast to rise 16 percent to a four-year high in January, intensifying pressure on the government to announce further support in next week's Budget.