Energy bills are likely to be hiked once again next April on the back of growing wholesale costs but also increased charges through Ofgem price cap reforms.
According to consultancy Cornwall Insight, Ofgem’s energy price cap is expected to be set at £1,762 for the three months from April, reflecting a 1% increase from January’s level.
Regulator Ofgem already increased the cap, which determines consumer bills, in October and has confirmed another rise from January.
Higher bills would largely reflect wholesale price movements on uncertainty around gas supplies due to the Russia-Ukraine war and Donald Trump’s presidency, Cornwall said.
However, further charges could be added to cover supplier bad debt and a network charge exemption scheme for energy-intensive industry, analysts added.
Such additional costs could leave the April price cap at £1,782 and up 2.5% against January’s as a result.
“Energy bills in 2025 are shaping up to reflect a perfect storm of regulatory changes and market turbulence,” principal consultant Craig Lowrey commented.
“There are a lot of unknowns, and while significant rises in price are currently unlikely, the scale of any increases will depend on how the market and the reforms unfold.
“What we do know is that the market is unlikely to lower bills, and affordability and fuel poverty will continue to be a pressing issue.”