Since war broke out between Russia and Ukraine, fuel costs have remained stubbornly high (Picture: Jacob King/PA Wire)
Your energy bills won’t be going down anytime soon, forecasters say.
Every three months, Ofgem announces what the energy price cap is – the maximum gas and electricity suppliers can charge people.
The cap, expressed in terms of how much the average home would pay a year, is expected to rise by £19 on January 1, Cornwall Insight said.
This would drag bills up by 1%, from £1,736 to £1,717. Unwelcome news for sure, given that the UK is currently in the throes of a cold snap.
The predicted increase, which Ofgem will officially announce Friday, isn’t a shock. Geopolitical chaos and disastrous weather fuelled by climate change has kept wholesale energy prices stubbornly high.
‘Supply concerns have kept the market as volatile as earlier in the year and additional charges have remained relatively stable, so prices have stayed flat,’ explained Craig Lowrey, a principal consultant at the research firm.
‘While we may have seen this coming, the news that prices will not drop from the rises in the autumn will still be disappointing to many as we move into the colder months.’
Experts warn that the energy price cap isn’t enough to protect vulnerable Britons (Picture: AFP)
The energy price cap influences the bills paid by about 27 million households in England, Wales and Scotland.
The current cap is in effect from October 1 to December 31.
If Cornwall Insight’s, well, insights hold true, it’s very unlikely your yearly bill will be exactly £1,717, however.
The ‘cap’ isn’t a limit of how much your gas and electricity costs can be. Rather, it’s how much suppliers can charge consumers for each kilowatt hour (kWh) of energy they use.
Fuel bills can very much exceed or fall well below this estimate and vary depending on energy use, location and the type of metre someone has.
According to Cornwall’s calculations, the unit rate for electricity will be 24.50p per kilowatt-hour, for a standing charge of 61p per day – this is what you pay every day even if you use no electricity.
The energy price cap is revised every three months (Picture: PA)
Gas, meanwhile, would be about 32p.
Cornwall stressed that the energy price cap is expected to fall slightly in April and again in October next year.
Lowrey said that the cap, first introduced in 2019, isn’t enough. Especially as millions of pensioners will face a winter without the Winter Fuel Allowance, an annual payment of at least £200 once available to all over-66s.
He said: ‘With it being widely accepted that high prices are here to stay, we need to see action.
‘Options like social tariffs, adjustments to price caps, benefit restructuring or other targeted support for vulnerable households must be seriously considered.”
He added: ‘The Government needs to keep momentum on the transition while acknowledging that immediate support is essential for those struggling now.
‘Inaction is a choice to leave people in the cold.’
The UK is bracing for snow, ice and cold temperatures this week (Picture: Danny Lawson/PA Wire)
National Energy Action director of policy and advocacy Peter Smith said: ‘The current cold spell is already having a devastating impact on the most vulnerable people.
‘With unaffordable energy bills and far less support available nationally this winter, millions of people are already rationing their energy use to dangerous levels or getting deeper into debt trying to keep warm.
‘With increased wholesale prices in the last few months, it is no surprise that there will be no let-up in the unaffordable cost of energy.
‘The most vulnerable people will sink into further difficulties and acute hardship.’
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