Average energy bills set to fall as Ofgem announces new price cap

Households should face lower average energy bills later this year following an announcement by Ofgem. The regulator has confirmed this morning (August 25) it is lowering its energy price cap on October 1.

The price cap currently stands at £2,074 per year for the average household in England, Wales and Scotland. But from October 1, that figure will be £1,923, a saving of £151.

It follows a drop in wholesale energy prices. Ofgem chief executive Jonathan Brearley said: “It is welcome news that the price cap continues to fall, however, we know people are struggling with the wider cost of living challenges and I can’t offer any certainty that things will ease this winter.”

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The energy regulator said it was cutting the price that a supplier could charge for gas from 6.9p per kilowatt hour (kWh) today to 6.89p from October 1. The price of electricity will fall from 30.1p per kWh to 27.35p, Ofgem said.

This means that the average household bill will end up at around £1,923 per year, according to the regulator’s calculations. Because the cap decides the per unit charge, households that use more will pay more.

This is based on an estimate that the average household uses 2,900 kWh of electricity and 12,000 kWh of gas. Last week experts at Cornwall Insight, an energy consultancy, expected gas to fall to 6.9p and electricity to just under 27p.

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