UK winter fuel bills to fall as Ofgem cuts price cap
By Frank Prenesti
Date: Thursday 08 Aug 2019
(Sharecast News) - Millions of Britons will see their winter energy bills fall by £75 after the industry regulator Ofgem reduced its price cap on standard tariffs.
The average annual energy bill for 11m homes will fall to £1,179 from £1,254 through the winter months from October 1 until March 30, reflect lower costs for companies, Ofgem said.
The industry's statutory regulator said it lowered the price cap to reflect falling energy market costs, which typically make up almost half of the average household energy bill.
A further four million households will benefit from a £25 fall in their winter energy bill under a separate cap for pre-paid meters, while pre-payment meter customers will pay a maximum of £1,217, down from £1,242.
Falling gas and electricity market prices more than offset the cost of investing in energy networks and renewable energy projects, which are paid for through customers' bills.
Ofgem chief executive Dermot Nolan said the price caps required suppliers to pass on any savings to customers when their cost to supply electricity and gas fell.
"This means the energy bills of around 15m customers on default deals or pre-payment meters will fall this winter to reflect the reduction in cost of the wholesale energy," he said.
The regulator introduced the energy price cap on 1 January after sustained pressure from the government to stop energy companies from taking advantage of loyal customers.
Under the price cap, energy companies are allowed to make only £21 of profit from the average annual energy bill, which has dealt a heavy financial blow to the biggest suppliers.
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