Energy bills in Britain to jump 13% in July as Ofgem lifts price cap to reflect higher gas price
Ofgem Raises Price Cap Amid Soaring Wholesale Gas Prices
By Susanna Twidale
Overview of the Price Cap Increase
May 27 (Reuters) - British households already squeezed by the cost of living will face energy bills averaging £1,862 a year from July after regulator Ofgem raised its price cap by 13%, blaming soaring wholesale gas prices driven by the conflict in the Middle East.
Government and Regulatory Response
The hike by the regulator, a non-ministerial government department, comes as Prime Minister Keir Starmer is under intense pressure to relieve some of the economic fallout he has said is from the war.
Statement from Ofgem CEO
“Today’s price change reflects continued volatility in global energy markets. This means higher wholesale gas prices, driven by ongoing conflict in the Middle East, is impacting the price we pay for energy,” Ofgem CEO Tim Jarvis said in a statement.
Factors Affecting the Price Cap
Wholesale energy prices are the largest single factor contributing to Ofgem's domestic price cap, which is set on a quarterly basis using a formula that also reflects suppliers' network costs and environmental and social levies.
Details of the New Price Cap
The new cap of £1,862 ($2,504) a year for average use of electricity and gas is up around £221 from the previous cap for April-June of £1,641 a year.
Exchange Rate Information
($1 = 0.7437 pounds)
Reporting Credits
(Reporting by Susanna Twidale in London and Raechel Thankam Job in Bengaluru; Editing by Bernadette Baum)
