Ofgem has announced that the average household's energy price cap will be reduced from £4,279 to £3,280 beginning April 1.According to the regulator, the nearly £1,000 reduction reflects recent drops in wholesale energy prices.However, domestic energy bills are still set to rise by an average of £500 a year despite the reduction as the government’s support for households becomes more limited.
The £3,280 figure indicates how much consumers on their energy suppliers’ basic tariff would pay if the government’s Energy Price Guarantee (EPG) was not in place.Customers will pay approximately £500 more on their bills as the government's EPG becomes less generous beginning in April, resulting in an average bill of £3,000.When the upcoming end of the £400 energy rebate scheme - paid in six instalments of £66 and £67 per month - is considered, household energy costs will rise even further.Customers will pay approximately £500 more on their bills as the government's EPG becomes less generous beginning in April, resulting in an average bill of £3,000.When the upcoming end of the £400 energy rebate scheme - paid in six instalments of £66 and £67 per month - is considered, household energy costs will rise even further.Customers will pay approximately £500 more on their bills as the government's EPG becomes less generous beginning in April, resulting in an average bill of £3,000.When the upcoming end of the £400 energy rebate scheme - paid in six instalments of £66 and £67 per month - is considered, household energy costs will rise even further."Although wholesale prices have fallen, the price cap has not yet fallen below the planned level of the Energy Price Guarantee," said Ofgem CEO Jonathan Brearley. This means that bills on current policies will increase again in April. I know that this news will be deeply concerning for many families."However, today's announcement reflects the fundamental shift in the cost of wholesale energy for the first time since the gas crisis began, and while it won't make an immediate difference to consumers, it's a sign that some of the immense pressure we've seen in the energy markets over the last 18 months may be starting to ease.If the current drop in wholesale prices continues, there is a good chance that the price cap will fall again this summer, potentially lowering bills significantly."However, prices are unlikely to return to pre-energy-crisis levels. Even with the extensive package of government assistance currently in place, this is a difficult time for many households across the United Kingdom.When people are in difficulty, we encourage them to contact their supplier to ensure they are receiving all of the assistance and support they are entitled to. We also believe that, with bills remaining so high, there is a case to be made for urgently investigating the feasibility of a social tariff for customers in the most vulnerable situations."Citizens Advice chief executive Dame Clare Moriarty said the increase will "spell disaster" for millions of households unless the government intervenes.Unless the government reverses its planned reductions in the level of support for households under the Energy Price Guarantee, we estimate that the number of people unable to pay their bills will double from one in ten to one in five," she said."The government must maintain the EPG at its current level of £2,000. Recent drops in wholesale prices indicate that they have the wiggle room to do so. The alternative is that millions more people will be unable to keep their homes warm and their lights on."
By Zuesblog
