Liz Truss will today announce a £150billion package to freeze energy bills for up to two years as she ends the ban on fracking and gives the go-ahead for a new wave of oil and gas drilling in the North Sea.
Details of her package, which will see a price cap introduced for businesses, are beginning to emerge this morning ahead of a statement in the House of Commons later today.
Oil firms will be encouraged to exploit existing reserves in the North Sea, with as many as 130 exploration licences likely to be awarded.
Support
Typical household energy bills could be capped at around £2,500 a year, with firms also likely to get some relief.
It is unclear how long the support will last, but the government is expected to borrow up to £150billion to pay for it.
Currently, a typical household's annual gas and electricity bill is due to rise from £1,971 to £3,549 in October.
The system to support business could be more complex than that for households and is likely to be reviewed more often. According to reports, it could see the government force energy firms to offer specific reductions on the unit price of the energy used by firms.
Business groups have welcomed the plan, although the British Chambers of Commerce warned "it remains to be seen" whether it goes far enough in providing the support that firms need.
Opposition to windfall tax
Yesterday, Ms Truss also reinforced her opposition to any fresh windfall tax on the country's oil and gas producers.
During her first Prime Minister's Questions, she stressed the need for the UK to increase its energy supplies to deal with the current crisis, and pledged to "open up" the North Sea.
Ms Truss added: "I understand that people across our country are struggling with the cost of living, and they are struggling with their energy bills.
"That is why I as prime minister will take immediate action to help people with the cost of their energy bills, and I will be making an announcement on that tomorrow (Thursday) and giving people certainty to make sure they are able to get through this winter.
"But we can't just deal with today's problems. We can't just put a sticking plaster on it. What we need to do is increase our energy supplies long-term, and that is why we will open up supply in the North Sea."
On the subject of any new cash raid on North Sea energy producers, Ms Truss said: "I am against a windfall tax. I believe it is the wrong thing to be putting companies off investing in the UK, just when we need to be growing the economy.
Put off investors
"If taxes are put up, that will put off investors, and ultimately that will mean fewer jobs, less growth and less opportunities."
Former Chancellor Rishi Sunak unveiled the energy profits levy earlier this year after the big jump in oil and gas prices led to soaring profits for North Sea producers.
The move was unpopular with the offshore sector as it means that operators are now paying tax at 65% - more than three-times higher than the standard rate of Corporation Tax.