Current energy price cap predictions may show fuel prices holding steady in the coming months, but if the last four years have taught us anything it’s that the energy market is anything but predictable. Chris O’Shea, Chief Executive of British Gas parent company Centrica, spoke this week to advise against complacency with regard to energy costs.
The ongoing conflict in Russia and Ukraine continues to impact both global energy supply and demand. Most recently, the Wagner uprising saw UK wholesale gas prices alone spike by 13%, highlighting the volatility of the current market.
What are the current price cap predictions?
There seem to be no expectations for the energy price cap to fall to pre-energy crisis levels in the foreseeable future. Industry analyst Cornwall Insight Consultancy predicts that the energy price cap will remain at a similar level for the next six months, falling slightly in October to £1871 and then rising in January to £1,900.
It’s important to note that Ofgem will update its definition of a typical energy user from October to reflect lower average use across consumers. This is the basis for the annual estimate for price cap tariffs.
Households should expect to see a smaller drop in bills than the price cap itself might indicate. To estimate your energy bills accurately, look at the per unit cost and daily standing charge of your tariff, or use our handy bills calculator which has been updated with the July price cap figures.
Centrica warns of the ‘danger that we get complacent’
Despite price cap predictions indicating energy prices will at least remain steady, Centrica Chief Executive Chris O’Shea advised against overconfidence in the resilience of the UK energy industry.
“I think that there’s a danger that we get complacent because last winter was okay and because prices are quite stable now,” he said.”But when we had trouble between the Wagner group and the Russian military last week we saw energy prices go up by about 20%.”
“I think that there’s a danger that we get complacent because last winter was okay and because prices are quite stable now,”
He also reminded consumers that prices remaining steady was not the same as a return of affordable energy. “I think the first act of the crisis is over…I think what we’ve got to remember is the energy prices had more than doubled before Russia invaded Ukraine. Now, prices are back down to pre-invasion levels but they’re still two and a half times the long run average.”
What do these price cap predictions mean for consumers?
Centrica’s comments on the energy price cap reflect the advice given by Please Connect Me’s team of Connections Experts, as well as consumer advocates like Money Saving Expert’s Martin Lewis. You should switch to a fixed-rate energy tariff at the current energy price cap.
Fixed-rate tariffs at this price are currently available, including from energy firms with top-rated customer service and sustainability commitments like Rebel Energy. Switching to a fixed rate tariff protects you against future jumps in the cost of energy, regardless of international events. Read more about switching to a fixed-rate tariff here.
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