Energy bills to fall in weeks as Ofgem lowers price cap
25.05.2023 - 07:07
/ manchestereveningnews.co.uk
The average household energy bill will be slashed by £426 a year when Ofgem lowers its price cap in the coming weeks.
The cap - which limits the maximum amount suppliers can charge customers for their energy usage - will be lowered to £2,074 annually from its current £3,280 per year. The energy regulator said the £1,206 reduction to the cap reflected recent falls in wholesale energy prices.
The new price cap will come into effect from Saturday, July 1. The lower cap will replace the Government’s Energy Price Guarantee (EPG), which currently limits the typical household energy bill to around £2,500.
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It means the average household will see their annual bill drop by £426. The cut to the cap marks the first time consumers on default tariffs have seen their prices fall since the global gas crisis took hold more than 18 months ago, Ofgem said.
At its peak, the price cap reached £4,279 and, “whilst today’s level is lower than last quarter, it is still above the levels it was before the energy crisis took hold, meaning many households could still struggle to pay bills”, the regulator added.
Ofgem chief executive Jonathan Brearley said more focus will be needed for government, the regulator and the industry to support the most vulnerable groups this winter. Mr Brearley said: “After a difficult winter for consumers it is encouraging to see signs that the market is stabilising and prices are moving in the right direction. People should start seeing cheaper energy bills from the start of July, and that is a welcome step towards lower costs.
“However, we know people are still finding it hard, the cost-of-living crisis continues and these bills will still be