Energy price cap falls by more than £1,000

This figure – announced today (27 February) – indicates how much consumers would pay on their energy supplier’s basic tariff if the government’s Energy Price Guarantee (EPG) were not in place, with this being set at £3,000 from 1 April – meaning that consumers will not pay the full level of the energy price cap. 

According to the regulator, the reduction in the price cap level reflects a significant drop in the cost of buying and providing energy for customers and expects that – if it continues – will mean the prices paid by consumers will drop for the first time since the global gas crisis by the summer.  

Commenting on this, Ofgem chief executive Jonathan Brearley said: “Although wholesale prices have fallen, the price cap has not yet fallen below the planned level of the EPG. This means, that on current policy, bills will rise again in April. I know that, for many households this news will be deeply concerning.

 
“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 reduction in wholesale prices we’re currently seeing continues, the signs are positive that the price cap will fall again in the summer, potentially bringing bills significantly lower. 

“However, prices are unlikely to fall back to the level we saw before the energy crisis. Even with the extensive package of government support that is currently in place, this is a very tough time for many households across Britain.”