Consumer champion Martin Lewis has issued stark warnings that households will unlikely feel the benefit of the falling cap on energy prices, implemented by regulator Ofgem.
“In practical terms, people aren’t going to be feeling any real benefit,” he told the BBC’s Laura Kuenssberg over the weekend when asked about a predicted drop in the cap from July.
“They’re going to be paying the same that they were over winter, and next winter will be as expensive as the winter just gone.”
Cornwall Insight analysts forecast the cap, which determines how much suppliers can charge per unit of electricity and gas, will fall to £2,053 per year come July 1, down from £3,280 currently.
Ofgem’s cap had risen to £4,279 on an annual basis between January and March, up nearly 290% from £1,104 when it was introduced in January 2019.
Gas, which determines electricity prices, has approached almost two-year lows this week, falling to £0.64 per British thermal unit, similar to figures recorded in June 2021, before an August 2022 peak of £6.40, according to Trading Economics.
However, predictions for the new price remain 80% higher than the £1,138 cap run by Ofgem in the summer of 2021, despite wholesale prices having fallen.
“We have monumental questions about consumer energy bills coming forward,” Lewis added.
“They’re too expensive, they’re badly structured, there’s no competition in the marketplace.”
Ovo Energy began offering fixed-rate tariffs below the government’s £2,500 price guarantee in late March, becoming the first to do so after many suppliers held off due to uncertainty around gas prices following the pandemic and war in Ukraine.
Lewis called on the government to continue to support households with energy bills, ahead of a reduced price guarantee from July, adding “change” was needed to stem higher prices.