Ofgem has raised the price cap by £47/year for dual fuel customers, saying that wholesale gas and electricity costs have risen since the level was last updated in February. “This is mostly due to the global rise in oil prices feeding through to wholesale gas prices which impacts both domestic heating and electricity generation,” it said.
Suppliers have to keep their prices below the level of the safeguard tariff, introduced in April last year for prepayment meter customers and extended in February to 1 million consumers who are on poor-value standard variable tariffs and receive the Warm Home Discount.
Ofgem adjusts the level of the safeguard tariff twice a year, based on a pre-defined methodology set by the Competition and Markets Authority to reflect the estimated underlying costs of supplying energy.
Ofgem is working on a price cap for the remaining estimated 11 million households on default tariffs. That should be implemented by the end of the year following publication of a statutory consultation later this month.