- Ofgem raises energy price limit.
- Energy costs to fluctuate in 2024.
- Transition to sustainable energy needed.
In January, the energy regulator Ofgem will increase its price limit for the average annual household energy bills to £1,898, marking a £64 rise, as per research firm Cornwall Insight.
A commonly accepted forecast predicted that energy prices would climb in the first three months of 2024 before declining later.
When the price limit for the final three months of 2023 takes effect on Sunday, the typical annual energy bill will stand at £1,834, a drop of approximately £200 from three months prior.
This figure is lower than the initial estimate of £1,925 due to Ofgem’s downward revision of average household consumption. Increased prices and more energy-efficient appliances have led to reduced electricity consumption.
Energy suppliers’ maximum price per unit of energy is lowered by Ofgem as wholesale oil and petrol prices fall.
With wholesale prices once again on the rise, forecasts have adjusted accordingly.
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However, Cornwall Insight predicts that the average household bill’s price limit will decrease to £1,819.60 by April 1, 2024.
Prices are expected to remain elevated compared to current levels until July 2024, with an average monthly charge of £1,781.37. Starting from October 2024, annual expenses are projected to be £1,825.
Dr. Craig Lowrey, the principal consultant at Cornwall Insight, commented, “While the increase is minor, it underscores the need to avoid assuming that prices will keep falling and eventually return to pre-pandemic levels.
Policies need to be enacted to address the possibility that higher energy prices have become the new norm.
Only by continuing our shift away from fossil fuels and towards secure and sustainable domestic energy sources can we reduce our vulnerability to such global factors and, consequently, stabilize our energy prices.”
