A £10bn support package is to be unveiled by the Government to help households with soaring energy bills.
Programs such as the Warm Homes Discount could be expanded, and community tax cuts could also be announced as early as Thursday, the BBC said.
One-off payments to some vulnerable households and a further cut in VAT on fuel could also be announced.
The support package is expected to be funded in part by an unexpected tax on oil and gas companies that could raise £7bn.
The government is under intense pressure to act as the cost of living for households soars.
The package comes as the Government repairs its call under fire following Sue Gray’s report of lockdown parties at Downing Street.
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New government support for households is expected to be at least £10bn and further increases in existing support such as the warm house rebate, one-off payments to some vulnerable households and possibly a further council tax cut and of VAT on fuel.
The current Warm Home Discount scheme offers low-income households a one-off annual rebate of £150 on their electricity bill between October and March. Chancellor Rishi Sunak announced in April that the program would be extended to March 2026 and open to three million people.
Support has also been provided in the form of a £200 reduction in energy bills this autumn, but the money will have to be repaid over the next five years, as well as a £150 tax refund for people living in the bands AD England. Similar programs exist in Wales and Scotland.
The typical household energy bill alone rose by an average of £700 in April and is likely to rise by a further £800 in October, the UK’s energy regulator has warned.
The head of Britain’s energy regulator told MPs on Tuesday that the energy price cap, which limits how much suppliers can raise prices, is expected to rise to £2,800 a year due to continued volatility in gas prices.
This means the typical household bill could rise by £800 a year and Ofgem warned that 12 million households could fall into energy poverty.
The windfall tax was called for by the Labor Party but opposed by many in the Conservative Cabinet, including Business Minister Kwasi Kwarteng.
The Prime Minister is understood to have sided with Mr Sunak in support of the tax on energy companies.
A windfall tax is a government way of raising money, and is a type of levy aimed at companies that are fortunate enough to benefit from something they weren’t responsible for — in other words — a windfall.
Among energy companies, firms like Shell and BP made record profits as gas and oil prices soared, most recently because of the Russian invasion of Ukraine.
Shell reported a record £7 billion in profit for the first three months of this year, while BP posted its highest profit in 10 years at £5 billion.
Proposals to tax income from other power producers, such as some older wind farms and nuclear power plants, which have also recorded windfall profits, have been shelved.
The energy price cap rose sharply to £1,971 back in April, meaning households using a typical amount of gas and electricity are now paying an extra £700 a year on average.
Higher energy bills are driving prices up at their highest rate in 40 years, with the cost of fuel and groceries also taking a toll on household budgets.
Ofgem chief executive Jonathan Brearley said global gas market conditions had “deteriorated” following the Russian invasion of Ukraine, raising concerns about possible supply problems.
He warned the price cap could soar above £2,800 if Russia – one of the world’s biggest exporters of natural gas – decides to halt supplies.
Europe gets about 40% of its natural gas from Russia, so sudden supply shortages could have a huge economic impact.
While the UK would not be directly affected by a supply disruption as it imports less than 5% of its gas from Russia, it would be affected by rising prices on world markets if demand in Europe increases.
Mr Brearley told MPs price increases in the gas market were “a one-off event not seen since the oil crisis of the 1970s”.
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