In a welcome relief for households across the country, the UK's energy regulator has confirmed a significant drop in the energy price cap this summer.
From 1 July, the cap set by Ofgem will fall by 7%, or roughly £122, bringing the average annual bill for a typical dual-fuel household paying by direct debit down to £1,568. This marks the lowest level since the Russian invasion of Ukraine triggered a global energy crisis.
What the New Cap Means for You
The price cap dictates the maximum amount suppliers can charge per unit of energy. The new rates will be:
- 24.50p per kilowatt hour (kWh) for electricity
- 6.04p per kWh for gas
- The standing charge remains unchanged at 60p a day for electricity and 31p a day for gas.
It is crucial to understand that this is a cap on the unit price, not your total bill. Your final amount will always depend on how much energy you actually consume.
A Cautious Note Amidst the Good News
While the decrease is positive, experts are quick to warn that bills remain substantially higher than pre-crisis levels. The average bill is still hundreds of pounds more than it was before the energy market turmoil began.
Jonathan Brearley, Ofgem's chief executive, acknowledged the continued struggle for many, stating: "There are still big issues that we must tackle head-on to ensure we build a system that’s more resilient for the long term and fairer to customers."
The Political Debate Over Energy Costs
The announcement immediately fuelled political debate. The government highlighted the fall as proof its policies are working. However, opposition parties and campaigners argue that more must be done to support vulnerable families, calling for a more targeted social tariff to replace the current cap system.
With a general election on the horizon, the cost of living and energy bills are set to be a central battleground, keeping the issue at the forefront of public and political discourse.
