The energy price cap, which determines gas and electricity bills for UK households, could soon be reviewed every three months, the energy regualtor Ofgem has revealed.
They said the shake-up would ‘reflect the most up to date and accurate energy prices.’
The price cap was brought in two years ago to limit costs of gas and electricity but the pandemic – and increase in people working from home – caused a rethink of the proposal.
Ofgem said in a statement: “A more frequent price cap would reflect the most up to date and accurate energy prices and mean when prices fall from the current record highs, customers would see the benefit much sooner.
“This change would also help energy suppliers more accurately predict how much energy they need to purchase for their customers, reducing the risk of further supplier failures which ultimately push up costs for consumers.’
Ofgem say the change will help energy suppliers more accurately predict how much energy they need to purchase for their customers, reducing the risk of further supplier failures which ultimately push up costs for households.
Jonathan Brearley, CEO of the energy regulator, said: “Our top priority is to protect consumers by ensuring a fair and resilient energy market that works for everyone.
‘Our retail reforms will ensure that consumers are paying a fair price for their energy while ensuring resilience across the sector.’
He added: ‘The last year has shown that we need to make changes to the price cap so that suppliers are better able to manage risks in these unprecedented market conditions.’
A consultation will follow and, if successful, Ofgem’s proposed changes would be implemented from October.
