Ofgem have announced that the energy price cap will increase by 80% for the cap period 1st October 2022 to 31st December 2022, due to rising wholesale costs.
The average domestic dual-fuel tariff will increase to £3,549 per year from the 1st October – almost treble what it was in October last year.
Jonathan Brearley, CEO of Ofgem, said:
“We know the massive impact this price cap increase will have on households across Britain and the difficult decisions consumers will now have to make. I talk to customers regularly and I know that today’s news will be very worrying for many.
“The price of energy has reached record levels driven by an aggressive economic act by the Russian state. They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy. Ofgem has no choice but to reflect these cost increases in the price cap.”
“The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year. We are working with ministers, consumer groups and industry on a set of options for the incoming Prime Minister that will require urgent action. The response will need to match the scale of the crisis we have before us. With the right support in place and with regulator, government, industry and consumers working together, we can find a way through this.”
Mr Brearley added that winter gas prices were 15 times higher than normal conditions, the equivalent to paying £400 to £500 to fill up a car with petrol.
The next cap will be introduced in January 2023. Although Ofgem is not offering predictions because the market remains “too volatile”, it warned that prices could get “significantly worse through 2023”.
It’s estimated the price cap will affect 24 million households – around 85% of the population.