Energy bills could exceed £3,200 a year in October, Ofgem head admits as costs of gas and oil continue to rise
- The annual energy bill was previously expected to be £2,800 in October
- Jonathan Brearley, CEO of Ofgem, has suggested they could reach £3,200
- Experts predict annual energy bills of more than £3,600 for households by early 2023
- The energy bill has already increased by 54% in April compared to the six months before
Energy bills likely to skyrocket faster than predicted, chief of energy regulator ofgem said.
Ofgem chief executive Jonathan Brearley said in late May that from October, households are likely to pay more than £800 a year more on their energy bills.
However, he admitted to MPs on Monday that his earlier forecast of rising energy costs was probably too low.
Ofgem said in May it expected the energy price cap to reach £2,800 when it is changed again in October.
Ofgem sets limits on energy prices – currently around £2,000, they could rise to over £3,000 in October
Ofgem CEO Jonathan Brearley gave testimony to the Public Account Committee on Monday 11 May
Rising gas prices have knocked down electricity costs amid cost of living crisis
He told the committee: “It’s clear given the price dynamics we’re seeing, given the ongoing impact of the Russian invasion of Ukraine, that there’s positive price pressure there — as prices look higher than when we made that estimate. — but we won’t be making any ongoing comment until we’ve made our formal announcement.”
When committee member Sarah Olney, Lib Dem MP for Richmond Park, asked: ‘Imagine it’s in the region of £3,200, and it may or may not be, but it will be higher… than it is now’, he replied ‘yes ‘.
The energy price cap has risen 54% to £1,971 in April as gas prices soar amid the cost of living crisis.
The energy cap could rise to £3,244 a year from October, before skyrocketing further to £3,363 between January and March, according to experts at Cornwall Insight.
Price caps regulate the bills of approximately 23 million homes in England, Scotland and Wales and are set by Ofgem.
The ceiling is based on the market price of gas and electricity and changes four times a year.
Starting this week, direct payments will be sent to low-income households to help with rising living costs and utility bills.