5th Feb 2021 07:54
(Alliance News) - The UK's energy regulator Ofgem on Friday said an energy price cap will be raised, pushing up bills to "pre-pandemic levels".
The decision means UK customers who get their energy from the likes of SSE PLC, Centrica PLC's British Gas and E.ON SE will have bills raised by nearly GBP100.
"Ofgem has announced today that from 1 April 2021 the price cap will return to pre-pandemic levels, principally as a result of changes in wholesale energy prices," the regulator said.
A "big increase" in wholesale prices has meant the cap for 11 million default tariff customers has risen to GBP1,138 from April 1, up by GBP96. The measure will last for six months.
For four million pre-payment default customers in the UK, bills will go up by GBP87 to GBP1,156.
"The price cap protects consumers who have not switched energy supplier by ensuring they pay a fair price for their electricity and gas. Ofgem adjusts the level of the cap up or down twice a year to reflect the costs of supplying electricity and gas for suppliers. Households on default tariffs are saving an estimated GBP75 to GBP100 a year or GBP1 billion in total on their energy bills as a result," Ofgem added.
A price cap came into force back in January 2019, it covers 11 million default tariff price and four million customers who pay their energy bills using meters, essentially a pay-as-you-go model, where users charge up credit on gas and electricity cards.
By Eric Cunha; [email protected]
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