Energy Price Cap 2018 Update
Energy price cap 2018 update:
Energy prices are on the rise once again. Soon after UK energy regulator Ofgem announced the launch of the energy price cap, they increased the cap level for the second time this year due to higher wholesale costs.
The new energy price cap is designed to protect energy consumers from being overcharged, but energy costs look to be on the rise once again after Ofgem raised the variable tariff cap by £47 per year. Ofgem’s safeguard tariff will rise to £1,136 in October for those who pre-pay for their fuel.
The rise in the energy cap comes after a series of price hikes from the UK’s biggest energy suppliers.
Energy price cap by region
Gas and electricity prices have always varied by region. For example, customers in the South West currently pay an average of £49 per year more for gas and electricity than those the East Midlands, the cheapest region.
When the energy price cap takes next month, the lowest price will be in Yorkshire at £1111, with the highest in the South West at £1173 – a difference of £62 annually.
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How much are the energy price cap 2018 increases?
- February: £57 increase in the tariff
- Latest: £47
- This means that the cap has gone up by over £100 this year
CEO of Ofgem Dermot Nolan said: “Any price rise for customers is unfortunate. But while the level of the tariff will rise in October, these customers can be confident that this increase is justified and that their energy bill reflects the real cost of supplying gas and electricity.”
Already, all of the Big Six energy providers have increased their prices this year – some more than once. Read more about the Bix Six energy price hikes here.
British Gas price increase adding fuel to customer concerns
British Gas’ parent company, Centrica, recently announced a price increase of 3.8%, affecting 3.5 million customers. The increase in standard variable tariff (SVT) from 1 October will cause the average bill to rise by £44 to £1,205 a year.
Customers unaffected by the price hike are 2.4 million customers on fixed rates and those who became customers in March when the SVT was withdrawn.
Why are energy prices increasing?
- 20% increase in wholesale energy costs (British Gas quotes figures that since April this year, electricity prices have increased by 18% and gas prices have increased by 21% and in the wholesale market).
- The cold winter weather depleted gas store and gas production.
- The UK depends on gas to power electricity generators, which means that electricity prices are closely linked to gas prices.
Energy price cap UK – update
According to The Times, an analysis of the 30 best annual dual-fuel tariffs on the market found that these tariffs have risen on average from £864 to £1,042 – £178 more expensive than at the same time in May. Energy suppliers have increased the prices of their cheapest deals by 21% in five months.
What can consumers do?
The easiest way to avoid falling victim to increasing energy prices is to switch suppliers and secure a fixed-rate tariff. Customers can radically change the amount they pay, simply by taking action and choosing a better deal.
Smarter Business can take the hassle out of shopping the market and comparing quotes for businesses of all sizes.
Contact a Smarter Business energy expert today to switch suppliers and save money!