Households urged to send meter readings ahead of energy price cap drop
That comes in on July 1 and will see lower bills
Last updated 29th Jun 2023
Households have been urged to send meter readings to their energy supplier, ahead of Ofgem's lowered price cap coming into effect on Saturday (July 1).
The average household energy bill will fall by £426 a year from July, after Ofgem dropped its price cap following tumbling wholesale prices.
The regulator announced it is cutting its price cap from £3,280 to £2,074 from July 1, marking the first time consumers on default tariffs have seen their prices fall since the global gas crisis took hold more than 18 months ago.
Households have been partly shielded from the most recent rise in prices by the Government's Energy Price Guarantee (EPG), which limited annual energy costs to £2,500 for the average household - subsidising Ofgem's price cap.
Ofgem's latest cut means its cap will again govern household bills, resulting in a reduction of £426 from £2,500 to £2,074 - a fall of about 17%.
Households should submit meter readings before midnight on June 30 to ensure they are paying the lower prices as soon as they come into effect.
Accurate readings will stop the household's supplier from estimating usage and potentially applying the old higher prices to energy that is used after June 30.
Those who, for whatever reason, cannot submit readings ahead of June 30 should do so as close to the date as possible, keeping a date-stamped photo as proof.
The energy price cap sets a limit on the maximum amount suppliers can charge for each unit of gas and electricity.
The headline price cap figure is an average across households rather than an absolute cap on bills, so those that use more will pay more.
'Welcome relief'
Energy spokesman at the Go Compare deal comparison site, Gareth Kloet, said: "This drop will come as a very welcome relief for many households who have been struggling to pay their energy bills in the past year.
"If you compare energy prices with winter 2021 - when the price cap was set at £1,277 - the past 12 months have been a huge struggle for many, so this weekend's drop is definitely a step in the right direction. However, it's important that you take a meter reading so that you can make the most of the price drop.
"By taking a meter reading on June 30, before the price drop comes into force, it will mean that your energy company cannot charge you at the higher rate for any units that have been used after that date."
'Still roughly the same as last Winter'
Co-ordinator of the End Fuel Poverty Coalition, Simon Francis, said: "As the new price cap comes in for most households, customers are still going to be paying roughly the same for their energy as they did last Winter.
"And after months of inflation and the wider cost of living crisis, people are even less able to afford these high energy bills.
"The Government needs to use the summer to fix Britain's broken energy system, because for millions of people the energy bills crisis is far from over.
"This means ramping up energy efficiency programmes, introducing a Help To Repay scheme to deal with the record levels of public energy debt and reforming energy pricing arrangements so that the benefits of cheap renewable energy are passed onto households."
The cost of living crisis is affecting many:
Interest rates and inflation go up
Inflation rose by 8.8% in the 12 months to January 2023, down from 9.2% in December 2022. With interest rates also rising to 4%, those saving money will earn more interest on their finances, whilst those paying mortgages would pay more interest to the bank.
Energy bills
The price of energy went up incredibly as the cost of living crisis hit, with the gas price spike caused largely by the war in Ukraine. The price cap - which is set by an independent regulator to help offset costs onto customers - was set to rise to £3,549 for an average home in October but a price freeze from the government restricted the typical bill to £2,500. That's still an increase of 27% from the previous energy cap and as it's a cap on unit cost, the more energy you use the higher your bill will be.
Food prices
The cost of a weekly shop also has gone up as a result of the cost of living crisis. As a result of the war in Ukraine, a number of products including cooking oils and wheat have been disrupted. This means that several products are now considerably more expensive, driving bills up for customers.
Prices at the pumps
The average cost of petrol has also rose to unprecedented levels. Supply lines for petrol have been thrown into doubt as a result of the war in Ukraine, as Russia is a large export partner for gas, oil and fuel. In April 2022, the average price for a litre of petrol on the forecourt was 160.2p, whilst a litre of diesel would cost 170.5p. By late June 2022 the price had risen to an average of 190.9p for a litre of unleaded and 198.9p for a litre of diesel. In March 2023 the price wass on average of 147.03 in petrol and 167.04 in diesel.
Average cost of filling up a car with petrol hits £100
On 9th June 2022, the average cost of filling up a car with petrol hit £100 for the first time ever. Diesel had already hit that milestone. It comes as the cost of fuel hit a record high of one pound eighty a litre. The 2p rise was the biggest daily jump in 17 years. Prices have dropped by at least 20p per litre since the high point.