Customers of British Gas, OVO, EDF, EON, Octopus and other providers are being warned to brace themselves for an extra £144 charge from next week - equating to an additional £12 a month. This comes as the energy price cap is set to rise from October 1, leading to price hikes for customers of UK energy companies.
The impending increase in the cap is due to a surge in wholesale gas prices, which has triggered the cost escalation. From October 1, courtesy of the new cap imposed by Ofgem, customers can anticipate their energy bills to rise by an average of £12 per month.
This change was announced by Ofgem in a quarterly review on 23 August. The regulator's price cap only applies to individuals in England, Scotland and Wales who are on standard variable or default tariffs.
This encompasses most households, regardless of whether they pay via direct debit or a prepayment meter. However, it does not apply to the small proportion of people still on fixed-rate tariffs.
The actual annual cost per customer will vary based on individual energy usage, reports Birmingham Live. If your gas and electricity consumption exceeds what £1,717 can cover, you will be charged more.
What is actually capped is each unit of electricity: 24.5p per kWh (up from 22.36p), each unit of gas: 6.24p per kWh (up from 5.48p) and the electric standing charge: 60.99p (up from 60.12p), as well as the gas standing charge: 31.66p (up from 31.41p).
Juliet Phillips, from the thinktank E3G, has stated that the upcoming budget on October 30 presents an opportunity to "fix our broken energy system". She expressed her hopes for targeted support for low-income households struggling with energy bills.
"Longer term, the UK needs to squeeze gas out of the power system, scaling up investments in renewables and low-carbon energy storage," she added. Meanwhile, Energy Secretary Ed Miliband commented: "The rise in the price cap is a direct result of the failed energy policy we inherited, which has left our country at the mercy of international gas markets controlled by dictators. The only solution to get bills down and greater energy independence is the government's mission for clean, homegrown power."
