According to the UK’s energy regulator, the energy price cap will rise to about £2,800 in October.
Ofgem Chief Executive Jonathan Brearley warned MPs on the Commons business committee about the rise. Due to continuous volatility in the gas market, Mr Brearley told the committee that the price cap, which is presently £1,971, will be increased.
He described the price increases as a once-in-a-generation occurrence not witnessed since the 1970s oil crisis. The Chief Executive of Ofgem has expressed concern that the number of individuals living in fuel poverty could quadruple.
The maximum price per unit that suppliers can charge customers is known as the energy price cap. It increased in April, resulting in an average annual increase of £700 for families using a typical amount of gas and electricity.
Mr Brearley said:
‘I am afraid to say conditions have worsened in the global gas market since Russia’s invasion of Ukraine. Gas prices are higher and highly volatile. At times they have now reached over ten times their normal level.
‘I know this is a very distressing time for customers, but I do need to be clear with this committee, with customers and with the government about the likely price implications for October.
‘Therefore, later today I will be writing to the Chancellor to give him our latest estimates of the price cap uplift.’
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