The energy price cap is now expected to rise to around £2,800 in October, according to the UK’s energy regulator.
Jonathan Brearley, Chief Executive of Ofgem, warned MPs on the Commons business committee about the increase. Mr Brearley told the committee that the price cap, which is currently £1,971, will increase due to continued volatility in the gas market.
He said the price rises were a once in a generation event not seen since the oil crisis in the 1970s. The Ofgem Chief Executive also warned that the number of people in fuel poverty could double.
The energy price cap is the maximum price per unit that suppliers can charge customers. It rose in April, meaning that homes using a typical amount of gas and electricity are now paying an extra £700 per year on average.
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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