The UK’s vitality utility regulator has introduced down its value cap to replicate current decreases in wholesale costs, however warned the cap stays above pre-energy disaster ranges and plenty of households may nonetheless battle to pay payments.
The annual quantity suppliers can cost a median family drops to $2,550 (GBP 2,074) for the third quarter, from $4,040 (GBP3,280) in April-June, the Workplace of Fuel and Electrical energy Markets (Ofgem) mentioned in a press launch. The figures are based mostly on the everyday consumption of dual-fuel households paying by direct debit.
“Right this moment’s replace signifies that, for the primary time for the reason that world fuel disaster took maintain greater than 18 months in the past, costs are falling for purchasers on default tariffs”, it mentioned.
The revision, down greater than two instances towards the worth cap’s peak of $5,270 (GBP 4,279), was introduced a day after the Workplace for Nationwide Statistics (ONS) reported an easing in annual family vitality prices. The buyer value index inflation fee for housing and family companies (water, electrical energy, fuel and different fuels) stood 12.3% April 2023, down from 26.1 % the prior month and 13.2 % April 2022.
Fuel costs dipped one % between March and April, the primary easing in fuel costs month on month since October 2020, the ONS mentioned. The identical interval a yr in the past noticed a 66.8 % rise in fuel costs.
Electrical energy costs additionally decreased 1.1 % between March and April 2023, after spiking 40.5 % in the identical interval 2022.
“Folks ought to begin seeing cheaper vitality payments from the beginning of July, and that could be a welcome step in the direction of decrease prices”, Ofgem chief government Jonathan Brearley commented within the announcement.
However the company warned although the worth cap fell from the final quarter, “it’s nonetheless above the degrees it was earlier than the vitality disaster took maintain, that means many households may nonetheless battle to pay payments”.
“Whereas the worth cap has dropped from its winter peak, it stays nicely above the pre-2021 common, and many individuals will nonetheless discover such excessive payments tough to pay”, it mentioned, calling on “extra focus” by the federal government and the business to assist essentially the most weak this winter.
Brearley mentioned: “The place persons are struggling, we urge them to contact their provider who will be capable to supply a spread of assist, equivalent to cost plans or entry to hardship funds.
“Within the medium time period, we’re unlikely to see costs return to the degrees we noticed earlier than the vitality disaster, and subsequently we imagine that it’s crucial that authorities, Ofgem, client teams and the broader business work collectively to assist weak teams”.
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