The government has announced plans to extend the energy price cap until the end of 2021.
According to the Department of Business, Energy Industry Strategy (BEIS), the new cap means 11 million households across the UK will save energy over the next year.
“The energy price cap was essential to ensure that customers don’t pay too much on their bills, so we’ve kept it for at least a year,” said Business and Energy Secretary Arok Sharma.
“Switching energy suppliers and finding the best value deal is the best way to save invoices, but this government decides that all customers will be treated fairly and that they will get the protections they deserve.”
The price cap was first introduced last January after it wanted to “rip” customs duties from suppliers. The price cap was reduced in the summer as wholesale gas prices plummeted to their lowest prices in 20 years.
Ofgem CEO Jonathan Brearley said the regulator “continue to protect consumers in difficult months to work with industry and government to build greener, more equitable energy systems.”
Peter Earl is Energy Director at Comparethemarket.com. He states: “There is a real risk as a recognition that British citizens should consider an extension to the government price cap as an absolute ceiling for people to pay, as an acknowledgement that the cap is affordable for energy.
“Currently, there are 191 energy tariffs in the market that are cheaper than the £1,042 price cap. When temperatures drop and people increase the heating one or two, switching to a competitive one or two-year fixed-rate transaction is an effective way for households to lock down cheaper energy transactions,” he added.
