Household energy bills will soon be affected by the soaring price of fossil fuels globally, according to energy regulator Ofgem.
Speaking to the BBC, Ofgem said that increasing prices for gas in particular “will feed into all customer energy bills in the UK”. However, Ofgem also said that the energy price cap was one of the “best tools” for ensuring that customers continue to pay a fair price for the energy they consume.
But, with the current price cap set to rise for the second time this year in October, customers are still set to see their energy bills increase. Overall, a typical dual fuel user is likely to see their bill go up by £139 per year, while a prepayment customer will see a rise of £153.
However, customers need to remember that the price cap only limits the price that companies can charge. As a result, you should always see the price cap as a backstop and you should never use it to limit the amount you spend on your energy bills. Instead, to save money on your bills, you should either run an online price comparison or you should contact your supplier directly and ask to be switched to a better fixed-term deal.
- Reduce your energy bills: See the best deals in your area now
Why are bills rising?
Energy bills have been rising rapidly over the course of 2021 due to a number of factors, including rising wholesale prices, increased demand, a lower supply of gas imports and extended cold spells last winter and spring.
At the start of September, the UK had to fire up two old coal power plants in order to meet electricity demands. In addition, the still autumn weather we’ve experienced has meant that wind farms have not generated as much power as normal, while spiking prices have made relying on gas costly.
Robert Buckley, an energy analyst at Cornwall Insights, said prices for power are at all-time highs - 10 times the prices of last summer.
Adding to this, Audrey Gallacher, Energy UK’s deputy chief executive, said: "Due to the unprecedented price increases in natural gas, National Grid, the electricity system operator, has had to make some tough choices about where we get our power from in order to maintain security of supply."
Energy UK added that it “recognises” the impact increased energy prices would have on customers. It also said that anyone who is worried about their energy bills should contact their supplier.
Switch today and save
If you’re worried about the impact that rising wholesale prices will have on your energy bills, then now is the perfect time to run an energy comparison and switch to a new supplier and energy deal. This will allow you to select a fixed-term deal that will lock in a great rate for the next 12 months or longer.
The switching process is simple. All you need to do is input some basic information about your home and your energy use, and you’ll be shown all the best energy deals in your area from the UK’s best energy suppliers. You can select the one that’s right for you and complete the process in a matter of minutes.
Alternatively, if you like your current supplier, you can contact them directly and ask to be switched to a better fixed-term deal.
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Tom is a freelance copywriter and content marketer with over seven years' experience. Originally from an agency background, he is proud to have worked on campaigns for a number of energy providers, comparison sites and consumer brands.