Warning that energy bills will rise in coming months despite £1,000 drop in price cap
20.02.2023 - 17:37
/ manchestereveningnews.co.uk
Households are set to see the cost of each unit of electricity and gas they use soar from the start of April, the final forecast from energy consultancy Cornwall Insight has said.
The Ofgem price cap on energy bills, which regulates what energy suppliers are able to charge, but not necessarily what households pay, will fall by around £1,000 to £3,295, the analysts said. But, because of the way the government’s energy support works, households will be left paying an extra 20% for their energy and will also not get monthly payments of £66 or £67 towards their energy bills.
The amount that people pay for their energy is currently regulated by the government’s energy price guarantee. This limits the amount that domestic customers pay to 34p per kilowatt hour (kWh) for electricity and 10.3p per kWh for gas.
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For an average household that works out at around £2,500 per year. This limit is set to become less generous from the beginning of April, rising to an average bill of £3,000.
But energy suppliers are allowed to charge more, with the government picking up the difference in each household’s bill. How much a supplier can charge is decided by a separate measure, the Ofgem price cap.
The price cap is reviewed once every three months. It is currently set at £4,279 per year for the average household, meaning that the government has probably been paying about £1,779 per year to energy suppliers on average for every household they serve between September and March.
But the predicted fall of the Ofgem price cap to £3,295, and the rise of the energy price guarantee level to £3,000 means the government will be paying just £295 per