Energy bills for 15 million households will increase by at least £139 from October because of a rise in wholesale energy prices, regulator Ofgem has said.
Watchdog Ofgem said today that energy customers on default tariffs paying by direct debit will see the sharpest jump in prices since the cap was introduced, taking average energy bills to £1,277.
Pre-payment customers will see costs rise by £153, from £1,156 to £,1309.
The increase has been driven by a rise of more than 50 per cent in energy costs over the last six months, with gas prices hitting a record high as inflation jumped amid the easing of pandemic restrictions, Ofgem said.
On the Today Programme, the Chief Executive of Energy UK, Emma Pinchbeck defended the uplift. She said: “Its really hard to absorb the additional costs of buying energy given the record breaking prices we’ve seen in the international gas market.”
According to Pinchbeck most suppliers have been making little or no profit from retail due to the volatility of fossil fuel prices which are likely to “keep going up.”
Responding to the news, James Plunkett of Citizens Advice warned price rises “could lead to a perfect storm for families this autumn, hitting people at the same time as a Universal Credit cut and the end of furlough.”
Justina Miltienyte, energy policy expert at Uswitch.com pointed out that come October energy bills will be “an eye-watering” £235 more than they were a year ago, following a £96 price hike back in April.
“Households on standard variable tariffs have faced continued uncertainty over bills,” said Miltienyte “But this time, it’s less of a pendulum and more of a pummelling.”