Ofgem proposes 3-monthly price cap review of energy prices

The energy sector regulator has proposed switching to a 3-monthly review of the energy price cap.

Currently, Ofgem is responsible for setting a price gap for energy prices every six months which it calculates by looking at what costs energy suppliers face before setting a reasonable rate.

Usually this causes a slight rise in prices every 6 months, however due to the global energy situation, April 2022 saw a huge increase in energy prices of an average of £708 per year, per household.

What would a 3-monthly price cap review do?

The huge price increase on UK energy bills is added to a broader cost of living crisis being felt by millions of households across the UK, and Ofgem knows this. After reviewing their data, they believe they may have a greater chance of letting bill-payers enjoy some respite if they moved to a 3-monthly review schedule, allowing them to take advantage of fluctuations in the market price of gas and electricity.

It means that in theory, "when prices fall from the current record highs, customers would see the benefit much sooner", Ofgem said.

As is stands, a further price increase of 32% is expected at the next review, scheduled for October.

How can you fight rising energy prices?

The global situation for energy looks bleak at present, but there are things you can do to keep your own costs down. Check out our blog on ‘How to save money on heating’, as well as giving thought to your boiler servicing to ensure your boiler is running efficienciently, as well as exploring eco grants to see if you can claim free insulation work on your home.