Energy bills set to fall for millions of households
The price cap, which protects about 11 million households, is set to fall from £1,179 to £1,162 for the April-September period. The pre-payment meter cap, which protects a further 4 million households, will fall from £1,217 to £1,200 per year for the same six months.
Wholesale gas and electricity prices are currently at their lowest levels for about 10 years, and there had been speculation that Ofgem would make deeper cuts, of between £20-£60.
Ofgem said in its statement that “a strong supply of gas, such as record amounts of liquefied natural gas and healthy gas stock inventories, has been the main factor pushing down wholesale prices”.
Mr Brearley said the default price cap was designed to “protect consumers who do not switch from overpaying for their energy, whilst encouraging competition in the retail market”.
“Suppliers have been required to become more efficient and pass on savings to consumers. In its first year, the cap is estimated to have saved consumers £1bn on average on their energy bills and switching rates have hit record levels.
“Households can reduce their energy bills further by shopping around for a better deal,” he added.
This announcement comes shortly after Ofgem announced their nine point plan to prioritise the climate crisis.