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Gas prices
Ofgem reduces the price cap due to lower wholesale energy costs following Covid-19
One-Minute Read
The Week Staff
Friday, August 7, 2020 - 2:29pm
Millions of households across the UK will pay lower energy bills this winter after Ofgem reduced the price cap starting from October.
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Energy bills: how to save money on gas and electricity The regulator has confirmed that due to lower wholesale energy costs following Covid-19, the price cap from October to March has been lowered by £84 to £1, 042 per year for 11 million households on default dual-fuel energy tariffs.
A further four million households who use pre-payment energy meters will see a decrease of around £94 per year, from £1, 164 to £1, 070 a year.
Jonathan Brearley, chief executive of Ofgem, said: “Millions of households, many of whom face financial hardship due to the Covid-19 crisis, will see big savings on their energy bills this winter when the level of the cap is reduced.”
Ed Dodman, director of regulatory affairs at the Energy Ombudsman, added: “This reduction in the price cap represents a much-needed financial boost for millions of households, at a time when many people are struggling due to the economic impact of Covid-19 and lockdown.”
Shop around for deals
Ofgem has also recommended that the price cap is not lifted at the end of this year and that it should remain in place in 2021 for households on default tariffs and prepayment meters.
However, BBC News reports that the cap is likely to rise in April. This is because wholesale prices have started to recover after hitting 20-year lows in the spring.
Speaking to BBC Breakfast, Brearley advised customers to shop around for better deals.
He said: “Phone up your supplier and ask them to put you on the best deal they can offer. If you can go further and get into the market and switch supplier, that will get you an even better deal than the regulated tariff.”
https://www.theweek.co.uk/energy-prices/107747/energy-bills-big-savings-for-millions-of-uk-households-this-winter