Ofgem ups UK price cap

Ofgem ups UK price cap

Up to 15 million UK households are set to see an increase in their energy bills as of April, after the energy regulator, Ofgem, revised their price cap as a result of higher energy costs.

Ofgem said a substantial change in wholesale energy costs during the second of 2018 meant it has been forced to increase a cap on default energy tariffs by £117 to £1,254, which will affect 11 million households.

Meanwhile another cap that was introduced in 2017 on pre-pay meters, affecting 4 million households, in will increase by £106 to £1,242 each year.

“Last year higher oil prices, amongst other factors like the higher demand for gas from the ‘beast from the east’, led to a rise in wholesale gas prices. Because of the importance of gas as a source of electricity generation, this also led to higher wholesale electricity prices,” Ofgem said.

The £117 hike was higher than the expected £100, as Ofgem said at least £74 of the increase was down to higher wholesale prices.

Dermot Nolan, Ofgem chief executive, said: “We can assure these customers that they remain protected from being overcharged for their energy and that these increases are only due to actual rises in energy costs, rather than excess charges from supplier profiteering.”

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