Any hopes that energy suppliers might hike their standard tariffs to below the energy price cap were dashed now that both British Gas and EDF Energy have both increased rates to the maximum amount permissible.
With effect from 1 April 2021, customers of both British Gas and EDF Energy who are on either Standard tariffs or other default tariffs will see their bills increase by over 9%. For customers paying by monthly direct debit this means an increase of £96-£97. For those paying by card or cheque the increase is £101-£102.
Joe Malinowski, founder of energy price comparison website The Energy Shop commented….
"We all knew this was coming but that doesn’t make it any easier to swallow. Households are not only facing increased rates for their energy, but also higher usage due to lockdown. If the headlines look ugly, then the reality is uglier still."
Joe Malinowski, concluded.
"There is no point keeping your fingers crossed and hoping it won't happen. Energy bills are going up and if your energy supplier hasn't hiked bills yet, then it is only a matter of time. The good news is that there are plenty of fixed energy tariffs that can protect you from these price hike and save you up to £193 as well."
This is the 6th time the cap has been set since it was introduced on 1st January 2019.
So far, we have had 4 cuts and 2 massive increases (see Table 1 below). On balance this leaves Standard Variable Tariffs £41 (3.5%) lower than they were before the cap came into effect. To put this into context, over that time wholesale gas prices have fallen by 13%.
A quick reminder… The energy price cap was introduced to bring "an end to rip-off energy prices once and for all".
It was supposed to achieve this by reducing the difference between poor value Standard Variable Tariffs and the cheapest energy deals in the competitive market so that those customers who couldn't or wouldn't switch, would end up overpaying by less. Still overpaying, but just by less.
So, has the energy price cap delivered?
Analysis from energy price comparison site TheEnergyShop.com shows that: