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Energy bills set to drop after slight fall in wholesale prices

25 Aug 2023 3 minute read
Picture by Peter Byrne / PA Wire.

The average household energy bill will fall after wholesale prices dropped slightly.

Energy regulator Ofgem said the new cap on a unit of gas and electricity would reduce the average bill to £1,923 from October 1, from £2,074 per year.

The average customer with a prepayment meter will see their bills fall to £1,949 per year.

This average is based on an estimate that the typical household uses 2,900 units of electricity and 12,000 units of gas.

The energy regulator said it was cutting the price of gas from 6.9p per kilowatt hour (kWh) today to 6.89p from October 1. The price of electricity will fall from 30.1p per kWh to 27.35p.

The price cap applies to Wales, England and Scotland.

Ofgem chief executive Jonathan Brearley said: “It is welcome news that the price cap continues to fall, however we know people are struggling with the wider cost-of-living challenges and I can’t offer any certainty that things will ease this winter.”

But despite the fall in the cap consumers still face the prospect of paying for more this winter because Government support which was in place last year has gone.

Then, the cap was effectively superseded by the Government’s Energy Price Guarantee which kept the average household’s bill at £2,500.

In addition, the UK Government was also paying around £66 per month towards each household’s energy bill.


Mr Brearley said that now that energy prices were easing, Ofgem had allowed suppliers to earn a little more money off their customers.

“This means there should be no excuses for suppliers not to be doing all they can to support their customers this winter, and to reinforce this we’ll be introducing a consumer code of conduct which we will look to have in place by winter,” he said.

Mr Brearley is one of many to question the effectiveness of the price cap and point towards the benefits of a so-called social tariff, which would offer cheaper gas and electricity to those most in need.

Without that, experts expect that average energy bills will remain at around £2,000 for vulnerable households for years to come.

Labour’s shadow energy and net zero secretary Ed Miliband said: “Higher energy bills are unfortunately here to stay under the Conservatives – even with this fall, bills are significantly higher than they were only three years ago.

“The problem is the Tories have learnt no lessons from this crisis. They continue to side with the oil and gas companies making record profits over hardworking British families, with their refusal to fix the gaping loopholes in the windfall tax or make the sprint we need for clean power, keeping the onshore wind ban and failing to insulate homes.”

David Cheadle, chief operating officer at the Money Advice Trust, the charity behind National Debtline, said: “This is an extremely worrying time for people who have fallen behind on their energy bills, whilst grappling with high costs across the board.

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