Customers urged to shop around as price cap rises because of global market
Energy regulator Ofgem has today (Friday 23 August, 2024) announced an increase of the energy price cap for the final quarter of 2024.
The price cap - which sets a maximum rate per unit and standing charge that can be billed to customers for their energy use - will rise by 10% on the previous quarter from 1 October to 31 December 2024. For an average household paying by direct debit for dual fuel this equates to £1,717 per year, adding around £12 a month to an average bill.
Rising prices on the international energy market - due to increasing geopolitical tensions and extreme weather events driving competition for gas - are the primary cause of the rise, accounting for 82% of the increase.
Ofgem has today also published a paper on options to reduce domestic standing charges and increase the choices available to consumers. Standing charges are the fixed costs on bills that cover getting energy to people's homes. Options include in the short term, diversifying the range of tariffs to give customers more choice on standing charges, moving some of these up-front costs to the unit rate (the price charged for every unit of energy used), and in the long term, reviewing the allocation of network costs.
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