Energy bills for 15 million households will fall by at least £84 a year from October after the pandemic led to a sharp fall in wholesale gas and electricity costs. The energy regulator Ofgem said it was lowering the price caps that limit tariffs for households on standard variable tariffs or with prepayment meters. Bills for about 11 million homes on standard tariffs will fall by 7.5 per cent, or £84 to about £1,042 a year. Four million with prepayment meters will see a fall of 8 per cent, or £95, to £1,070 a year. Ofgem said depressed energy demand in the pandemic had led to a “sharp decrease” in wholesale gas prices since the cap was last updated in February, leading to a 30 per cent fall in the allowance for wholesale gas costs under the price cap. The allowance for wholesale electricity costs has also fallen, by about 14 per cent. But it warned that gas prices had started to recover after hitting 20-year lows in the spring and that “if wholesale energy prices continue to rise over the coming months, the cap is likely to rise in April to reflect these higher costs”.
Times 8th Aug 2020 read more »