Energy price cap increases
Ofgem, the regulator for the Gas and Electricity Markets, Has announced the price cap level will increase 1st April 2019.
Price caps were introduced on 1st January 2019 to replace the Standard variable tariff. This is set at a maximum price by Ofgem to prevent the energy suppliers from increasing their prices over that set price.
Don’t be an April fool
You can avoid this increase by taking charge of your own energy prices. It would be a good idea to get a fixed price tariff. You can see the Top Tariffs here
The official Ofgem notification
Ofgem have stated:
Today we have set the next price cap levels that will apply to prepayment meter and default energy tariffs, including standard variable tariffs. Due to increased costs to supply energy, particularly wholesale costs, capped tariff prices (the price per unit and standing charge) are likely to rise from 1 April.
Twice a year, in April (the ‘summer’ cap period) and October (the ‘winter’ cap period), Ofgem adjusts the cap levels to reflect the estimated costs to supply energy over the next six months. The latest adjustment means the level of the caps will increase in April 2019. The Default Tariff Price Cap by £117 to £1,254 and Prepayment Meter Price Cap by £106 to £1,242 for a dual fuel customer with typical usage*. Capped prices only increase when the underlying cost of energy increases.
The caps work to protect against overcharging by ensuring prices reflect no more than the underlying costs to supply energy. Around 15 million customers are currently covered by the caps. When the Default Tariff Cap came into effect on 1 January, prices fell by around £76 on average per year for customers using a typical amount of energy.
Suppliers who raise their capped tariff prices from 1 April must tell affected customers 30 days before the price rises take effect. We’ve created an online consumer guide and a toolkit of resources you can use in your own communications to help explain the price caps and give energy saving advice, including switching advice – the best way to cut fuel bills.
View our briefing note for an explanation of the factors behind the latest set levels and how the caps work to benefit consumers.
Everyone is going on about the energy price cap but nothing to show what this is, I would like to have details of the maximum cost per Kw h of gas and electricity that suppliers can charge and the maximum standing charges so that I can compare suppliers. can you provide this information ???
Hi Alan. Thanks for your comment. There are far too many variables to provide actual unit rates for the price cap. It depends on, where you live, how much you consume, type of meter, whether you use gas and electricity or electricity only.
The new price cap is set at £1254. This is based on the UK average consumption for gas at 12000 KWH’s and electricity at 3100 KWH’s
It doesn’t really matter how the suppliers reach their figures as long as they don’t charge more than £1250 for the average usage as shown above.
Further to note: This price cap only applies to consumers who either, don’t switch their energy supplier or those who have came off a fixed term price and been placed on the suppliers standard tariff.
Other points:
All suppliers won’t charge at the maximum capped price.
When you visit a comparison site, as long as you know the tariff you are currently on, and you know how much you consume, they can work out the savings for you.
Comparison sites won’t be calculating savings based on the suppliers increases yet. They will only show the savings based on current figures.
The price cap has only been put in place to safeguard consumers who don’t switch to cheaper online tariffs. Some people just won’t switch or don’t know how to switch their supplier. They would normally just accept whatever increase their supplier gives them.
Finally
It is quite irrelevant, because the comparison sites can work it out for you. But, if you would like me to give you a detailed breakdown of your personal rates, Just let me know your postcode, your current supplier, how many KWH’s of elctricity and gas you consume, how you pay for your energy, I would be happy to provide the information you seek!