Gas and electric bills in the UK could jump by almost £150 a year, placing pressure on millions of families struggling with household finances.
Ofgem is expected to boost the price cap by £150 a year for gas and electricity bills next week
The cost increase will hit 11 million families on default or “standard variable” tariffs who have not switched suppliers in the past year.
An extra 4 million households with pre-payment meters will face a similar increase.
In October, average annual bills will rise from £1,138 to around £1,288, an increase of 13 per cent.
In a blog earlier this week, Ofgem chief executive Jonathan Brearley wrote: “I know that the last 18 months have been tough for many households as a result of the COVID-19 crisis.
“Rising inflation and the forthcoming end of the furlough scheme on top of the impact that the pandemic has had on people’s livelihoods means that family finances are tight now.
“Unfortunately, against this backdrop I am alerting customers that global prices for fossil fuels, especially gas, are increasing at an unprecedented rate. Ultimately this will feed into all customer energy bills in the UK.
“Regrettably, the increase in wholesale costs will feed through to this price cap and, although final analysis is not complete and other costs will also determine the overall level, it could add around £150 per household to the next level of the price cap.”
In April, the cap was increased by £96-per-year.
Labour MP Darren Jones, chair of the business, energy and industrial strategy committee, told The Times: “Many customers will assume that the energy price cap protects them from changing energy prices.
“Because of this, it’s important that energy companies promote their best-priced tariffs and ensure they are fully using their funding to support customers in fuel poverty.”
