THE ENERGY price cap on household bills has fallen to an annual average of £2,074 between July and September, removing some of the financial pain inflicted by the unprecedented surge in gas and electricity costs.
Industry regulator Ofgem made the announcement against a backdrop of good news for the cost of living crisis – with wholesale energy prices falling.
They spiked last year after Russia’s invasion of Ukraine, which saw both oil and natural gas costs shoot up – a situation that was made worse by the imposition of sanctions on the Kremlin by Western governments.
The new cap figure compares to the £3,280 level set by Ofgem for March-June, meaning a £1,206 reduction in the cap from July and a reduction in average bills by £426 a year.
However, that cap is currently irrelevant.
That is because the government’s energy price guarantee (EPG), which limits the amount suppliers can charge per unit of energy used, ran throughout the autumn and winter months and remains in force until 1 July.
That keeps bills at around an average annual level of £2,500.
There is no further taxpayer support on the table from July onwards. The price cap, which is reviewed every three months, will take over again from then.
Current projections predict a stable outlook for energy bills at around the £2,000 level but such a sum remains more than £1,000 above the pre-pandemic average and much will depend on the potential for further wholesale market shocks.
Gas supplies remain the core worry for prices ahead.
Day-ahead wholesale costs peaked at an industry measure of 570p per therm last August but are currently at 66p.
