UK energy tariff cap will increase by up to 80% in October

The cap will rise from the current £1.971 ($2.325) paid per year for the average household to £3.549 ($4.180), regulator Ofgem said.

“The rise reflects the continued progression of global wholesale gas prices, which began with the end of lockdowns following the Covid pandemic and reached record levels as Russia slowly stopped gas supplies to Europe,” Ofgem said.

Taking the current trend into account, the agency warns that “prices could increase considerably in 2023”.

The tariff cap is calculated based on the average wholesale gas prices in previous months.

More increase coming

Analysts believe that the limit will exceed 4.000 pounds (US$4.730) in January and up to 6.000 pounds (US$7.096) in spring (northern hemisphere, autumn in Brazil), according to the most pessimistic projections.

In recent days, gas prices have approached historic levels recorded at the start of the Russian offensive in Ukraine.

“We are aware of the huge impact the tariff cap increase will have on households across the UK and the difficult decisions consumers will have to make,” said Jonathan Brearley, director general of Ofgem.

Ofgem, companies, suppliers and associations called on the government to adopt immediate measures to avoid a “dramatic” situation in the most modest families, which are already facing inflation of 10%, the highest among G7 countries.

According to the University of York, almost two-thirds of British homes will face the threat of energy poverty from next year.

© Agence France-Presse