The average household energy bill will rise by £94 a year from January after Ofgem increased its price cap in response to rising wholesale prices.
The regulator announced it is raising its price cap from the current £1,834 for a typical dual fuel household to £1,928 from January 1, driven almost entirely by rising costs in the international wholesale energy market due to market instability and global events, particularly the conflict in Ukraine.
Ofgem chief executive Jonathan Brearley said: ‘This is a difficult time for many people, and any increase in bills will be worrying.
‘But this rise – around the levels we saw in August – is a result of the wholesale cost of gas and electricity rising, which needs to be reflected in the price that we all pay.
‘It is important that customers are supported and we have made clear to suppliers that we expect them to identify and offer help to those who are struggling with bills.
‘We are also seeing the return of choice to the market, which is a positive sign and customers could benefit from shopping around, with a range of tariffs now available offering the security of a fixed rate or a more flexible deal that tracks below the price cap.
‘People should weigh up all the information, seek independent advice from trusted sources and consider what is most important for them, whether that’s the lowest price or the security of a fixed deal.’
Meanwhile, the public has placed the blame for the rising prices firmly at the door of the Government.
Polling conducted prior to the Autumn Statement for the Warm This Winter campaign found that well over a third of the public (37%) already attributed significant responsibility for the energy bills crisis to Government policy.
Hardly any respondents (3%) said that Government policy bore no responsibility for high energy bills.
Fi Waters, spokesperson for the Warm This Winter campaign, commented: ‘We’re devastated that the emergency energy tariff that would give hard-pressed families money off their monthly bills has not been adopted by the Chancellor in the Autumn Statement, but we’ve not given up.
‘The Government should be putting the vulnerable, disabled people, the elderly, those with medical conditions and the pregnant first rather than condemning them to living in cold damp homes.’
Simon Francis, coordinator of the End Fuel Poverty Coalition, commented: ‘These price hikes come at the worst possible time for households. Bills will go up just as winter bites hard and household finances are hit further by Christmas credit cards, the long January pay period and the ongoing wider cost of living crisis.
‘We warned Ofgem that a January price cap rise was a bad idea when the regulator consulted on this in 2022. Now the chilling effect of the change is being realised, the inhumanity of this policy is clear to see.
‘It will be anything but a happy new year for people trapped in Britain’s broken energy system.’
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