Energy bills are set to rise by £150 a year because the price cap for gas and electricity bills will be increased, it has been reported.
Regulator Ofgem is expected to announce next Friday that the price will go up due to soaring wholesale costs.
The changes deliver a financial blow for 11million loyal households who are on “standard” tariffs and have not switched supplier in the past year.
Their bills will increase from the current £1,138 to around £1,288 in October, reports The Sun.
This devastating news means the cap is at its highest since it was launched in January 2019.
The cap makes sure that companies could not take advantage of loyal customers who had not changed their tariff for a long time.
The price rise is also expected to affect a further four million households with pre-payment meters who could also see their bills surge.
Jonathan Brearley, chief executive of Ofgem, said: “There has been an unprecedented increase in global prices for fossil fuels like gas which have hit a record high.
“Because energy companies have to buy energy at a higher price, over time this increase will unfortunately feed through to customer energy bills.
“This increase in energy prices will feed through to the price cap which we will update next week."
He added that the update "takes into account many factors" and could add around £150 when it comes into effect on October 1.
Ofgem recalculates the price cap every six months and if wholesale costs fall it will be lowered next April.
Last month Dr Craig Lowrey, senior consultant at Cornwall Insight, told the Mirror wholesale energy prices has seen some of the biggest increases since the “Beast from the East” storms of 2018 and warned that energy bills could rise.
“Wholesale prices have been hit by a combination of factors,” he said.
“Underlying commodity prices have risen, so, too, have carbon prices.
“On top of this, underlying gas prices have risen considerably due to a cold winter across Europe and low levels of gas in storage facilities.”
“With a substantial increase in the wholesale price, it is extremely likely to expect this to be passed through fairly quickly in terms of prices to new customers.”
How to cut the price of your energy bill
Earlier this year, Ofgem said households could save £100 by shopping around for a fixed deal - but the charity Citizens Advice estimates this saving even higher at £200 a year.
Either way, it is likely you can save yourself a tidy sum if you haven't switched supplier in a while.
To see if you could be better off elsewhere, use a comparison site to compare prices.
A guide on ofgem.gov.uk includes a list of approved price comparison sites.
Those who would rather not switch should contact their supplier and ask to be moved to a cheaper fixed tariff which should still result in significant savings on their energy bill.
