HOUSEHOLDS could be in for yet another rise in energy costs from April as market “turbulence” and price cap reforms feed through to bills, analysts say.
The latest forecast from Cornwall Insight suggests that the energy price cap could rise to £1762 a year for a typical dual fuel consumer, a 1% increase from the cap of £1738 that comes into effect on January 1.
Cornwall Insight said the forecast reflected the economic and geopolitical factors influencing wholesale prices.
It warned that continued uncertainty regarding the future of the Russia-Ukraine conflict and its implications for gas supplies to Europe was now playing out against the second Donald Trump presidency and its impact on gas exports from America.
Ofgem changes the price cap for households every three months, largely based on the cost of energy on wholesale markets.
The cap does not set the maximum a household will pay for their energy but limits the amount providers can charge them per unit of gas or electricity, so those who use more energy will pay more.
Meanwhile, new energy network charges and other costs was also compounding an increase in the underlying costs of electricity and gas.
There was also the prospect of reforms adding extra costs to the cap, which could add at least another £20 to annual bills, Cornwall said.
Factoring in the proposed reforms, forecasts suggested the cap could rise to around £1782, or a 2.5% increase from January.
Prices are still expected to fall in July next year.
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Ben Gallizzi, energy spokesman at Uswitch.com, said: “This predicted rise in April’s price cap would mark a third consecutive hike for energy prices, adding to the current pain for households.
“This increase could mean the average household on a standard variable tariff would pay 1% more on their rates from April – on top of the 1% increase in January that we’re yet to pay.
“This is an early prediction so this 1% rise isn’t guaranteed, but energy prices remain uncertain.
“There are now a range of fixed deals available that are significantly cheaper than the predicted price cap for January, so it is well worth running a comparison to see how much you could save.
“Right now, the average household could save up to £112 per year against the current price cap by switching to a twelve month fixed deal.
“Consumers who are worried about paying their energy bill should check what energy help they are eligible for, and contact their supplier who may be able to offer support.”
