The price cap covers households on default standard variable tariffs, currently numbering around 23 million, and is currently reset every six months, based on wholesale prices.
It is expected to rise significantly again in its next reset in October, with Russia’s war on Ukraine adding to gas price volatility.
Gas prices have fallen in recent weeks in the UK due to an increase in imports and a limited ability to send them to Europe.
However, the way suppliers buy energy in advance as well as the continued volatility means this is unlikely to mean a drop in the October price cap.
Dan Norton, deputy director of price caps at Ofgem, said: “We expect this to be a further increase from the April cap level.
“I think there is still too much uncertainty to really pin down any particular number.
“There is even more uncertainty regarding the January cap level; there is still a long time before that, and a lot of things can still happen.”
Despite the added uncertainty for consumers of having their bills changed every three months, Ofgem says the move will ultimately save consumers money by making the market more resilient.
“These changes will reduce the risks associated with providing the default price cap tariff in volatile wholesale markets – which in turn will reduce costs for customers in the short and long term,” he said. .
More about this article: Read More
This notice was published: 2022-05-16 10:10:27