Gas burns price cap: Ofgem confirms price cap to jump by £139

The energy regulator said the change is due to record gas prices

The Big Zero report

UK energy regulator Ofgem has today confirmed that its price cap will jump by £139 from October 1st.

That change is expected to affect nearly 15 million energy customers.

Those on default tariffs paying by direct debit will see an increase of £139 from £1,138 to £1,277.

Prepayment customers will also see an increase of £153 from £1,156 to £1,309.

The watchdog said that increase is driven by a rise of more than 50% in energy costs during the last six months with gas prices hitting a record high.

It added gas prices have risen to a record high in Europe as a result of a recovery in global demand and tighter supplies.

That led to an increase in the cost of heating homes and a rise in electricity prices.

Ofgem announced yesterday it has decided not to include an additional allowance in the period from October 2021 to March 2022 to cover debt-related costs incurred by gas and power suppliers as a result of the Covid-19 pandemic.

Jonathan Brearley, Chief Executive of Ofgem, said: Higher energy bills are never welcome and the timing and size of this increase will be particularly difficult for many families still struggling with the impact of the pandemic.

“The price cap means suppliers only pass on legitimate costs of supplying energy and cannot charge more than the level of the price cap, although they can charge less.

“If you are struggling to pay your bill you can get in touch with your supplier to access the help that’s available and if possible, shop around for a better deal.

“I appreciate this is extremely difficult news for many people, my commitment to customers is that Ofgem will continue to do everything we can to ensure they are protected this winter, especially those in vulnerable circumstances.”

If you enjoyed this story you can sign up to our weekly email for Energy Live News – and if you’re interested in hearing more about the journey to net zero by 2050, you can also sign up to the future Net Zero newsletter. 

Latest Podcast