(MENAFN) UK energy customers can expect a significant reduction in their bills starting from the summer, as the energy regulator Ofgem has announced a 37 percent decrease in its price cap. This reduction translates to approximately 17 percent lower bills for consumers. Ofgem's quarterly update sets the price cap for dual fuel households paying by direct debit, based on typical consumption, at £2,074 annually for the period between July and September.
The decision to lower the price cap reflects recent declines in wholesale energy prices, according to Ofgem. The previous price cap, in effect from April to June this year, stood at £3,280, with customers paying an average of £2,500 for their energy bills during that period. Ofgem highlighted that the new price cap not only signifies a reduction from the previous quarter but also means lower bills for customers. Since October 2022, consumers have benefitted from the government's Energy Price Guarantee, which caps typical bills at £2,500.
The recent announcement brings welcome news for customers on default tariffs, as prices are falling for the first time since the onset of the global gas crisis over 18 months ago. At its peak, the price cap had reached £4,279. While the current levels remain below the peak, they are still higher than pre-crisis levels.
Ofgem's decision to reduce the price cap is aimed at providing relief to energy customers who have been facing higher bills due to volatile energy markets. The regulator's ongoing monitoring and adjustments to the price cap reflect efforts to ensure fair pricing and protect consumers from excessive costs. With this reduction, customers can anticipate a noticeable decrease in their energy bills, offering some respite in their household expenses.
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