Energy price cap to rise by 80% to £3,549 from October

Ofgem has confirmed that the energy price cap will increase by 80% to a record £3,549 a year for dual fuel for an average household from 1 October 2022. 

The rise will affect those on standard variable tariffs, with the record annual bill only being based on typical usage. At present, the price cap stands at £1,971 a year following a 54% rise in April.

As a result, the increase means that the price of energy has almost tripled in a year as last October the price cap stood at £1,277 for a typical household. 

It is reported that prices for a further 4.5 million households with prepayment metres will rise even higher, taking their typical annual bill to £3,608 a year.

The price of electricity will rise on average from 28p per kWh to 52p in October through to December 2022, while gas will go up from 7p to 15p per kwh. 

The news comes as energy prices are said to have risen sharply due to the war in Ukraine which has “threatened” supplies from Russia, which is also impacting the ongoing cost of living crisis. 

Jonathan Brearley, CEO of Ofgem, said: “We know the massive impact this price cap increase will have on households across Britain and the difficult decisions consumers will now have to make.

“The price of energy has reached record levels driven by an aggressive economic act by the Russian state. They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy. Ofgem has no choice but to reflect these cost increases in the price cap.”

He added: “The Government support package is delivering help right now, but it’s clear the new prime minister will need to act further to tackle the impact of the price rises that are coming in October and next year.”