The statement from Ofgem chief executive Jonathan Brearley was made to parliament's business, energy and industrial strategy committee. Although the regulator is only part way through its review of the next energy price cap in October and the figure isn't final, it anticipates it is likely to be at that level.
A rise in October is likely to put further pressure on those already struggling with the £693 rise in April. Forecasters are warning that without further government intervention, the number of people in fuel poverty - a household that spends more than 10% of its disposable income on energy - is likely to double to around 12 million people.
Why is the energy price cap likely to increase in October?
The expected increase in October is largely down to the volatility in the price of wholesale gas, a situation that has worsened in recent months due to Russia's invasion of Ukraine. Speaking about the estimated energy price cap rise, Mr Brearley said "We're really managing between two extreme versions of events: one where the price falls back down to where it was before - for example if we did see peace in Ukraine - and one where prices could go even further if we were to see, for example, a disruptive interruption of gas from Russia."
What help is being offered by the government?
The government took action back in February by announcing two energy rebates, comprising a £150 council tax rebate for those who fall within council tax bands A to D and an energy bill rebate of £200 that was to be repaid over 5 years. Chancellor Rishi Sunak has since announced a £15bn support package meaning the most vulnerable households will now receive up to £1,500 in support. Included in the package was an increase to the original energy rebate meaning all households will now receive a credit of £400 in October and crucially, it will no longer have to be repaid. We explain the energy-support package in more detail in our article "£400 energy support payment for all households in the UK"
How to find out more about energy prices
We have provided some further reading below including more information on the recent energy price cap increases, where to get help if you are struggling to pay your energy bills and, finally, more information about the energy rebates and how they work.
Energy bills to rise by £693 - what help is available?
Energy price cap increase - how will the rebates work and do you qualify?
Rising energy costs - what help is available and do you qualify?
£400 energy support payment for all households in the UK
Changes to energy price cap - what does this mean for your energy bills?
Book a free financial review
Looking to ensure your finances are on track? Our partner Unbiased will arrange for a qualified, FCA-regulated adviser to contact you
- Discuss your financial situation
- Identify what steps, if any, you should take
- Free and without obligation
