Fuel Prices to increase by 20% in April

“The Energy Price Cap is set by regulator Ofgem, based on a time-lagged assessment of the wholesale rates energy retailers pay.

On Monday 6th March, it announced the April to June Cap will fall 23%, down from the current £4,279/yr to £3,280 for someone on the rather meaningless, 'typical' bills amount (what you actually pay depends on what you use).

Yet that's still higher than the state-subsidised Energy Price Guarantee, set by the Government, that almost everyone (not N Ireland) is on. And as we pay the LOWER of the two rates, in April it's still the Guarantee rate we pay.

The Govt currently plans to increase the guarantee price by 20% in April.

So, from £2,500/yr for a 'typical' bill to £3,000/yr. This means we're in the perverse situation that the Cap will fall, but the Govt will increase what people pay by 20% (see our new April price calc for the effect on you).

And as it coincides with the end of the £66/month winter energy support payments, the effect's exaggerated.

So three weeks ago, a letter was sent to the Chancellor to ask him to postpone the increase. That letter's now supported by more than 85 big charities, and the industry trade body Energy UK. I think it's now better than 50-50 odds this will succeed. No guarantees though.

And if you're wondering why 'postpone', not cancel, well from July the Cap's likely to undercut the Guarantee, so the Guarantee will no longer be relevant, meaning it is cancelled.

Yet postponing is a more winnable ask, as it defeats the 'we can't, in case wholesale rates rise again' rebuttal.

NEW. Energy price rise calculator - what's your rise (it's not a straight 20%)?

The April price rise calculator will show what you're likely to pay. While it's set on the Guarantee rate, as that is the Cap minus a subsidy, as the Cap's changed, it can slightly shift the balance between the cost of direct debit and other ways of paying.