Cornwall Insight predicts the yearly cost of running your gas and electricity will fall to £1,732 this July.
British Gas, OVO, EDF, EON, Octopus customers set to have bills cut by £137 each
British Gas, OVO, EDF, EON, Octopus bills are predicted to fall by £137 a year this summer following a big rise from April 1. Cornwall Insight predicts the yearly cost of running your gas and electricity will fall to £1,732 this July.
It marks a welcome seven per cent drop from April’s price cap. Dr Craig Lowrey, Principal Consultant at Cornwall Insight, said: “The latest forecast drop will bring some relief to households and the government, offering a welcome sign that energy prices are moving in the right direction.”
He added: “However, we mustn’t get ahead of ourselves. While prices are falling, recent patterns show the impact that wholesale market volatility can have on bills in the space of just a few days.”
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Energy Price Cap changes are based on a published algorithm set out by regulator Ofgem. As it’s a publicly available algorithm, firms can use it to make predictions on how the Cap will change in future.
The current January-March Energy Price Cap is set at £1,738 a year for a typical household. On 1 April, the Price Cap will rise by 6% (meaning a household with typical usage paying by Direct Debit will pay £1,849 a year).
Wholesale gas and electricity prices increased by 30% from mid-December to early February. Uncertainty over global gas supplies is a significant factor (particularly with the ongoing situation between Russia and Ukraine).
But it’s worth remembering the price cap comes from Ofgem’s typical usage value, which they reference when discussing the price cap determining the maximum unit rate energy suppliers can charge.
However, your total spending on gas and electricity depends on how much energy you use and the daily standing rates specific to your area.
The daily standing charge is your daily fee regardless of how much energy you consume. It helps to cover the cost of supplying gas and electricity to your home. Think of it as the rental charge for your energy supply.