Swap fuel deals plea as energy price cap rises

      No Comments on Swap fuel deals plea as energy price cap rises

Government regulator Ofgem sets maximum prices that can be charged for gas and electricity to those on default “standard variable” tariffs. The new cap, to start on April 1, could see these households typically pay an extra £117 a year. Energy auto-switching service Weflip said customers should quickly shop around for a better deal.

Sally Jaques, head of energy, said: “Just three months after being introduced, the Government’s price cap is set to unintentionally deliver one of the biggest energy price increases the market has seen for years.

“From April, millions of households are likely to see their energy bills go up by £117, to £1,254.

“Before the cap was introduced, the big six competed on price, with their standard variable tariffs varying by around £50 to £100 a year.

“We are now likely to see them all rise, as one, to the level of the cap.

“The cap review reflects wholesale price movements, and these increases would probably have been passed on to consumers by their providers this year anyway. But this will do little to convince consumers that it [the cap] is making a big difference.”

Martin Lewis, founder of MoneySavingExpert.com, said: “The much-talked-about, much-vaunted, but ill thought through price cap will now feel like a damp squib to most.”

Advertisement

And he warned that the cap could still be higher than £1,254 a year, depending on energy usage.

But announcing the rise, Ofgem insisted that those affected will still pay a “fair price” for their energy as the rise reflected a genuine increase in underlying wholesale costs, rather than provider profiteering.

Wholesale costs have risen by 17 percent since the cap was set, it said.

Dermot Nolan, of Ofgem, said: “Under the caps, households on default tariffs are protected and will always pay a fair price for their energy.”

Ofgem said that in August it will review the level of the cap for the six-month winter price period, which comes into force on October 1.

Source
Daily Express :: Finance Feed
Finance

Related News  Bitcoin price: Cryptocurrency begins to rise in value - could it reach highs of last year?