Consumers may have been shocked to have received details of the new gas and electricity prices they will start paying on 1 April, including daily standing charges as high as 51p a day.
Last month the energy regulator, Ofgem, revealed the new caps on prices and warned that the average household will be paying just under £2,000 a year to heat and light their home – a 54% increase.
While that figure may have seemed rather abstract, householders have received a jolt of reality as the actual unit prices have been published.
Although providers can charge less than the cap, those who have been in touch with customers so far are moving prices up to the limit, which means £700-a-year-plus increases are on the cards for millions.
That could just be the start. Wholesale gas prices rose 28% on Thursday’s news that Russian forces had invaded Ukraine. If those are sustained, Ofgem will have to substantially increase prices again when they it reviews the cap for the autumn. That raises the prospect of gas and electricity bills of more than £2,500 a year.
British Gas has told customers on its capped tariffs that from 1 April they will pay 28p-30p per kWh for electricity. There will be a 45p-51p daily standing charge for electricity, and 27p-37p for gas.
Those who pay by direct debit will pay the least. Customers paying by cash or cheque on receipt of their bill, or because who have a prepayment meter, will be charged more. These are average prices, and will vary very slightly according to where you live.
Shell Energy wrote to its customers this week outlining very similar rates, and earlier this month EDF announced its prices would also go up in line with Ofgem’s cap.
Only those on long-term fixed tariffs signed with a supplier that has not failed will avoid the rises.
Ofgem allows suppliers to set their prices as long as the overall price comes in below or at the cap – the maximum they can charge.
From 1 April a British Gas dual-fuel customer paying by direct debit will pay £262 a year in standing charges alone, or £318 if they have a prepayment meter. And that is before they have consumed a single unit.
The cost of those units is also rising alarmingly. In the east of England, Shell Energy is raising the price of 1kWh of electricity from 20.871p to 29.239p. At the same time, its gas rates will change from 4.055p to 7.344p per kWh – about double those charged on average as little as a year ago.