The cost of some fixed rate energy deals hit nearly Â£ 3,000 yesterday as the regulator warned of a ‘significant’ increase in bills when the price cap revised.
Ofgem chief executive Jonathan Brearley has warned that part of the “unprecedented” rise in wholesale gas prices should be “passed on” to consumers.
Households should expect their bills to rise sharply the next time the energy cap – currently at Â£ 1,277 – is revised in April, he said.
But Mr Brearley also suggested the regulator could adjust the cap more regularly in the future to prevent energy providers from going out of business if costs suddenly rise.
The cost of some fixed rate energy deals hit nearly Â£ 3,000 yesterday as the regulator warned of a ‘significant’ increase in bills during price cap review
Asked about an increase in bills in April, he said the price change had been “phenomenal and unprecedented”.
âThe wholesale market has had extremely rapid ups and downs, so we cannot fully predict what that will be,â he added. “But looking at the costs that are in the system, we expect a significant increase in April.”
With gas prices so volatile, there are now only a handful of fixed offers available. Together and Bristol Energy’s more expensive one-year tariffs, which are âgreenâ offers, would cost the average household Â£ 2,991 – an astounding Â£ 1,714 more than the price cap.
The most expensive non-green fare was Scottish Power’s Â£ 1,907, Â£ 630 over the current limit. Even the cheapest fixed offer on offer, a green tariff from GE, was Â£ 495 more expensive at Â£ 1,772.
Ofgem chief executive Jonathan Brearley (pictured) warned that part of the ‘unprecedented’ rise in wholesale gas prices should be ‘passed on’ to consumers
Normally at this time of year, experts encourage customers to switch to a cheap fixed-line energy offering.
But as the gas crisis intensifies, households are urged to stay on their supplier’s default agreement for gas and electricity so that they are protected by the watchdog’s price cap. Energy.
Staying on a company’s standard variable rate was previously the most expensive way to pay for electricity, and customers could often save hundreds of pounds a year by switching.
But this year, there are no fixed offers cheaper than the price cap. Experts have accused suppliers, many of whom are struggling to stay afloat, of exploiting customer panic to come up with expensive fixed deals.
Scott Byrom, of comparison site TheEnergyShop, said: âWe hear from customers being told about longer term fixed rates rather than providers actively pushing standard rates.
‘This is very worrying. Suppliers should make it clear to customers that this is the cheapest offer rather than playing with consumer fear and offering high-priced fixed offers. ‘
Dozens of suppliers are at risk of being crippled by the energy price crisis, 12 of which are already going bankrupt this year.
Some companies, including Britain’s second-largest supplier Ovo, are now refusing to accept new customers, which could violate Ofgem rules. Bulb, which has 1.7 million customers, has stopped accepting customers online and will only accept inquiries over the phone.
Comparison sites, some of which are running again after temporarily shutting down their services, compound the confusion among households with advertising offers that are not available to new customers.
Households should expect their bills to rise sharply when the energy cap – currently at Â£ 1,277 – is reviewed in April, he said (stock image)
The energy market is in chaos after wholesale gas prices hit an all-time high, rising 40 percent on Wednesday. This means that many businesses cannot afford to continue supplying customers who signed up for their cheapest offerings months ago.
James Daley, consumer group Fairer Finance, said: âShopping around is not a given as it once was and weathering the current storm by sitting on a standard variable rate is probably the best course of action. safer.
âThe market is extremely volatile and we don’t know how many suppliers are going to collapse in the next few months. But if your business goes bankrupt, you won’t be cut off and lose your credit balance.
A spokesperson for Together and Bristol Energy denied that the companies were “pushing sales”.
âThe fixed-term deal price that we have in the market represents the current cost of energy and reinforces how the price cap protects consumers,â he said.
Ofgem said: “We are reviewing all market developments.”