The new Energy Price Cap has been set at a higher rate
Ofgem has stated:
From today 1 January 2024 the price for energy a typical household who use gas and electricity and pay by Direct Debit will go up by £94. This will take the energy price cap from £1,834 to £1,928 per year.
The amount you pay will depend on how much energy your household uses, where you live and the type of meter you have.
The new rates are as follows:
Energy unit price and Standing Charge for price cap from 1 January 2024 | |
Electricity | 28.62 Pence per KWh Daily standing charge: 53.35 Pence per day |
Gas | 7.42 Pence per KWh Daily standing charge 29.60 Pence per day |
The rates are based on UK average. Your own personal rates may differ slightly.
What is the price cap all about?
Initially, the price cap was put in place to protect the consumer. It was set at a maximum amount that energy
suppliers could charge. A few years back, the price cap turned into a disaster for many smaller suppliers. The wholesale prices were at one point, more than the supplier could charge the end user. This put many suppliers out of business.
So what is happening now?
The price cap is still a disaster. This particular cap is set much higher than it needs to be, and seems to be put in place to generate bigger profits for the supplier. Wholesale energy prices are lower than they have been throughout the whole of 2023.
In addition, the price cap has taken away the competitive edge from the energy industry. Consumers used to be able to get a cheaper price by shopping around online. Because a maximum amount suppliers can charge has been put in place, they have all set their rates at the maximum amount. This in turn, has destroyed the energy switching industry.
It’s time things were changed. A new system needs to be put in place that is fair on everyone!