By Ofgem announces the dreaded energy price cap
This morning, regulator Ofgem has announced the energy price cap after months of stress and worry for the public over soaring prices.
The cap is set to come into effect in April this year and will effect 22 million households.
Regulator Ofgem has announced that the energy price cap will rise by £693 in England, Wales and Scotland from April.
This is an increase of 54 per cent on standard tariffs.
The average customer bill will to rise to £1,971.
For prepayment customers, their price cap will rise by £708 to £2,107.
Individual bills will be different depending on whether you live in a small flat or a large house and what your energy use is.
Ofgem explains the increase in the price cap in a statement:”The increase is driven by a record rise in global gas prices over the last six months, with wholesale prices quadrupling in the last year. It will affect default tariff customers who haven’t switched to a fixed deal and those who remain with their new supplier after their previous supplier exited the market.
“The price cap is updated twice a year and tracks wholesale energy and other costs. It stops energy companies from making excessive profits, ensuring customers pay no more than a fair price for their energy. The price cap allows energy companies to pass on all reasonable costs to customers, including increases in the cost of buying gas.”
Rishi Sunak is set to make an announcement later on today to set out government plans which will help households with the price hike.
Updates to follow.
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