(Alliance News) - The UK Office of Gas & Electricity Markets said Friday that for the winter period the price cap on energy will fall to its lowest level on record, due to a sharp drop in wholesale gas costs following Covid-19.
The price cap will fall by GBP84 to GBP1,042 from GBP1,126 for the period from October 2020 to March 2021, the lowest level since the cap was introduced at the start of January 2019.
Meanwhile, the level of the cap for prepayment meter customers will also decrease by GBP95 to GBP1,070 from GBP1,164 per year for the same six-month period.
The energy regulator said the Covid-19 pandemic has caused a fall in energy demand, even though wholesale gas prices have started to recover since hitting 20-year lows in the spring.
Should wholesale energy prices continue to rise over the coming months, the price cap could rise in April to reflect these higher costs.
"Millions of households, many of whom face financial hardship due to the Covid-19 crisis, will see big savings on their energy bills this winter when the level of the cap is reduced. They can also reduce their energy bills further by shopping around for a better deal. Ofgem will continue to protect consumers in the difficult months ahead as we work with industry and government to build a greener, fairer energy market," said Chief Executive Jonathan Brearley.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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