Energy bills for 15 million households will increase by at least £139 from October 1 it has been confirmed by Ofgem.
Prices will hit a record high due to a 50% rise in wholesale prices, the UK's energy regulator announced.
The new plans will see an increase for those on default tariffs paying by direct debit of £139 from £1,138 to £1277. Prepayment customers will also see a steep increase of £153 from £1,156 to £1309.
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Surging global fossil fuel prices are already driving up inflation for consumers, making fixed rate energy tariffs not covered by the price cap, as well as petrol and diesel more expensive.
The price cap offers a safety net for customers who haven’t switched by making sure suppliers only pass on legitimate costs.
Jonathan Brearley, chief executive of Ofgem, said: “Higher energy bills are never welcome and the timing and size of this increase will be particularly difficult for many families still struggling with the impact of the pandemic.
“The price cap means suppliers only pass on legitimate costs of supplying energy and cannot charge more than the level of the price cap, although they can charge less.
“If you’re struggling to pay your bill you can get in touch with your supplier to access the help that’s available and if possible, shop around for a better deal.
“We have put tough rules in place to ensure suppliers treat customers who are struggling with bills fairly, and welcome their commitment to reach out to those who most need help this winter. Where help is not forthcoming, we will not hesitate to act.”
Price cap is adjusted twice a year based on the estimated prices of supplying energy.
It says gas prices have risen to a record high in Europe due to a recovery in global demand and tighter supplies. This is increasing the cost of heating homes and pushing up electricity prices.
Last winter, the level of the cap fell by £84 after passing onto customers the savings from lower wholesale energy costs as countries went into lockdown and demand fell.
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