London August 26 2023: UK energy regulator Ofgem has further reduced the consumer energy price cap, dropping it by 7% to GBP1,923 ($2,421) for the fourth quarter of 2023, it said Aug. 25.
The latest reduction brings the average dual-fuel energy bill for gas and electricity to the lowest since April 2022, Ofgem said.
However, the regulator warned that energy pricing for the coming winter remained uncertain.
"It is welcome news that the price cap continues to fall, however, we know people are struggling with the wider cost of living challenges and I can't offer any certainty that things will ease this winter," Ofgem CEO Jonathan Brearley said in the statement.
The price cap for the period Oct. 1-Dec. 31 relates to a dual fuel household paying by direct debit based on typical consumption.
Ofgem had also taken measures to ensure the stability of utility companies, Brearley said, after the gas and electricity market spikes of 2022 forced a wave of suppliers out of business.
UK wholesale month-ahead power prices peaked at over GBP500/MWh several times during 2022 and late 2021, while NBP gas rose as high as 598 p/th (Eur240.31/MWh) in August 2022, Platts pricing data showed.
Platts, part of S&P Global Commodity Insights, last assessed UK month-ahead power prices at GBP82.10/MWh Aug. 24, while NBP month-ahead gas was 80.88 p/th.
"There are signs that the financial outlook for suppliers is stabilizing and reasonable profits are returning," Brearley said. "With the small additional allowance we've made to Earnings Before Interest and Tax (EBIT), this means there should be no excuses for suppliers not to be doing all they can to support their customers this winter."