Energy prices set to soar by more than 50% as Ofgem announces new price cap across the UK

Every six months, energy regulator Ofgem sets the energy price cap and the new rate was announced this morning.

Energy prices will hike by 54% across the UK as the price of gas on the wholesale market has risen drastically since January 2021.

The cap will rise to £1,971 and will affect 22 million customers on variable gas and electricity tariffs.

The price of gas has caused many energy providers to go bust but now the remaining companies are passing on the cost to customers.

Wholesale prices are increasing due to a number of factors, which include a cold winter in Europe which has put pressure on supplies.

This has caused stored gas levels to be much lower than normal.

The new energy increase of £693 will be effective from April 1, 2022.

The energy price cap sets the maximum figure that can be charged to customers in the UK per year for their electricity and gas bills.

The unit measurement is a kilo-watt per hour and the cap only applies to those who are on a standard variable tariff (SVT), which is usually an energy provider's most expensive tariff.

Bill Bullen, Founder, and CEO of Utilita Energy said: ‘Today’s announcement of a £693 increase from April 1st will instil fear amongst millions more households, who, until six months ago, were able to afford the energy they needed. Despite the rising price of wholesale energy, a spike of this magnitude could still have been avoided had the regulator not made grave errors, despite suppliers’ warnings.

‘Last summer Utilita submitted a white paper which gave BEIS the blueprint to help every household save as much as a fifth on their energy bills, through smart technology, that all suppliers have the power to provide. Had the Government taken notice, and acted, all households would be on their way to making vital savings by now, but instead, the Government is introducing ill-targeted financial measures that won’t go far enough.’

Chancellor of the Exchequer Rishi Sunak is expected to release a council tax rebate announcement today.

SEE ALSO: Energy bills set to double as millions forced to choose between 'heating and eating' - but help is at hand

The chancellor will make a statement in the House of Commons at 11.30am and a press conference will be held at 5pm to provide further details.

The treasury is expected to announce a rebate of £150 for those in council tax bands A to D as a measure of support for those on the lowest incomes.

The move is expected to cost the Exchequer £9bn.

A message from the Editor, Mark Waldron

Subscribe here for unlimited access to all our coverage, including Pompey, for just 26p a day.