The price cap has been in place since January 2019, and it is a legislative requirement for Ofgem to regularly review the level at which it is set. It ensures an energy supplier can recoup its efficient costs, whilst making sure customers do not pay a higher amount for their energy than they should. The price cap, as set out in law, does this by setting a maximum suppliers can charge per unit of energy, according to a press release by Ofgem.

For the first three months of 2023, the energy price cap will increase to an annual level of £4,279 for an average dual fuel household paying by direct debit based on typical consumption, but bill-payers will still be protected by the government’s Energy Price Guarantee until the end of March 2024, as confirmed by the chancellor.

Consumers are not required to take any immediate action as a result of Ofgem’s announcement. Earlier this week, Ofgem set out the proactive action it was taking against 17 energy suppliers to ensure that consumers are protected this winter and beyond. The next quarterly price cap update will be on February 27, 2023.

Fibre2Fashion News Desk (NB)