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Energy watchdog Ofgem on Thursday hiked its price cap, though UK government measures mean households are largely protected from the latest spike in bills.
From January 1 until March 31, the UK energy price cap will be lifted to an annualised level of £4,279. The previous cap, which spans from the start of October to the end of the year, was set at £3,549.
The government has stepped in, however, ensuring the typical household will pay less.
The government’s energy price guarantee reduces the unit cost of electricity and gas, and will mean a typical dual-fuel direct-debit annual bill for January 2023 will remain at £2,500. However, this will increase to £3,000 from April next year.
‘Bill-payers will still be protected by the government’s energy price guarantee until the end of March 2024, as confirmed by the chancellor on Thursday 17 November,’ Ofgem explained.
The cap hike means the amount the government pays to subsidise energy bills increases to £15.1 billion for the three-month period, compared to £7.8 billion for the final three months of 2022, PA reported, citing figures from energy consultancy Auxilione.
The next Ofgem quarterly price cap update will be on February 27.
Ofgem in August announced it would announce caps on a quarterly basis rather than every six months like it previously did, this was due to turmoil in energy markets following Russia’s invasion of Ukraine.
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