Ofgem’s energy price cap will fall by 14% next April as the market finally stabilises after the outbreak of war in Ukraine last year, according to analysts.
Bills will be limited to £1,660 on an annual basis, Cornwall Analysts predicted on Wednesday, marking a £268 decrease from January’s cap price of £1,928.
This means the amount consumers pay per unit of electricity and gas will fall, given the cap represents how much suppliers can charge per kilowatt hour.
“The recent stabilisation of international energy markets has trickled down to April’s price cap predictions,” consultant Craig Lowrey commented.
“As households brace themselves for energy bill rises in January, current forecasts of price cap dips later in the year may offer a small light at the end of the tunnel.”
Ofgem’s cap has been set at £1,834 since 1 October, but will rise come January.
Under Cornwall’s prediction, consumers would be charged a maximum of 5.96p per kilowatt hour of gas and 24.09p per kilowatt hour of electricity from April, alongside daily standing charges of 30p and 58p respectively.
This would mark a fall from the 7.42 per unit of gas and 28.62p for electricity which will be charged under January’s cap.
Daily standing charges will rise though, from 29.60p for gas and 53.35p for electricity under January’s cap, according to Cornwall Insight.
“Waiting and hoping that we will avoid another global incident that sends energy prices climbing is not a sustainable strategy for government,” Lowrey added.
“To achieve substantial reductions below pre-crisis levels, we must focus on long-term strategies which increase domestic renewable energy sources and reduce our reliance on volatile imports.”