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Energy industry reacts to new price cap

Industry leaders have responded to Ofgem's latest price cap reduction, emphasising the ongoing need for targeted support amid continued high energy prices and record customer debt

Ofgem has announced a reduction in the energy price cap for the third quarter of 2024.

The cap will decrease by 7%, taking effect from 1st July to 30th September 2024.

This adjustment means the average household paying by direct debit for dual fuel will see annual costs drop to £1,568, which is £122 less than the previous year.

Households using prepayment meters will have an annual cost of £1,522, while those paying by standard credit will face an annual cost of £1,668.

Energy UK’s Deputy Chief Executive Dhara Vyas commented on the announcement, noting that while the reduction is beneficial for customers, energy bills remain higher than they were two years ago and prices are expected to stay high and unstable.

Dhara Vyas said: “As Ofgem underlined earlier this week, it’s only a return to relative normality.

“Energy bills are still larger than they were just over two years ago and prices will remain high and unstable for some time to come.

Customer debt is at record levels and likely to increase still further, so despite suppliers’ ongoing efforts to support households, the next government must work with the industry and Ofgem to put in place a long term solution that provides targeted help for those who need it and ensures so that bills are affordable for everyone.”

Dame Clare Moriarty, Chief Executive of Citizens Advice, stated that the reduction offers limited relief for households still facing cost of living pressures.

Dame Clare Moriarty said: “The fall in the energy price cap reduces bills slightly, but our data tells us millions have fallen into the red or are unable to cover their essential costs every month. 

“People cannot rely on lower energy prices alone to escape the financial issues they’ve been experiencing. That’s why we need better targeted energy bill support for those struggling to keep the lights on or cook a hot meal.”

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