Martin Lewis has delivered a bleak forecast on expected changes to the energy price cap. The energy price cap is the maximum rate that can be charged per unit of energy on a standard or default tariff for an average dual-fuel household paying by direct debit.
At present, the gas cap is fixed at 6.34p per kilowatt hour (kWh), and electricity at 24.86p per kWh until March 31. However, Lewis warns that energy companies’ predictions for the cap from April spell “bad news” for consumers.
As reported by the Express, the Money Saving Expert shared on X: “The predictions for what’ll happen to the energy price cap in April keep rising. EDF now predicted Ofgem will increase it by 3.3%, British Gas predicts 5%, Eon Next predicts 5.7%. Bad news.
“The predictions for what’ll happen to the energy price cap in April keep rising. EDF now predicted Ofgem will increase it by 3.3% rise, British Gas predicts 5%, Eon Next predicts 5.7%. We’re only a couple of weeks from the end of the assessment period. So that means..
“We’re only a couple of weeks from the end of the assessment period. So that means this is getting pretty firm. It’s now nearly unthinkable that it’ll drop, it’s going to rise, the big question is how much.”
Energy consultants Cornwall Insight expect the price cap to rise by 3 per cent on current rates, adding £4 a month on the average bill. The rise in costs is blamed largely on increasing energy volatility caused by global events across the world, such as the Russia-Ukraine war.
The early days of Donald Trump’s presidency and the threats of tariffs have also contributed to the uncertainty underpinning a rise in costs. An official announcement on the energy price cap rise is expected on February 25, which will set the rate for April to July.
A looming rise in energy bills comes at a time when many pensioners are struggling through a first winter without the winter fuel payment. Ofgem head Jonathan Brearley recently told the BBC: “We agonise over our price cap decisions and we go through every single item to make sure that it’s as low as possible for customers.
“The profit that we allow is about £40 out of (the average bill) £1,740 price cap. Now if we didn’t have that profit we can’t get service improvements, we can’t get the investments and we will end up in a place like we were a few years ago where companies started to go bust.”