The Office of Gas and Electricity Markets (Ofgem), which regulates electricity and downstream gas markets in the United Kingdom, will increase the energy price cap by 54% from 1 April 2022 due to a record rise in global gas prices over the last 6 months, with wholesale prices quadrupling in 2021. The price cap protects around 22 million households on default or variable rates on credit meters, including 4.5 million prepayment meter customers. Consumers on default tariffs paying by direct debit will see an increase of £693 (€822) from £1,277 (€1,513) to £1,971 per year (€2,335, +54%). Prepayment customers will see an increase of £708 (€840) from £1,309 (€1,552) to £2,017 (€2,391, +54%). The £1,971 per year level of the cap is based on a household with typical consumption on a dual electricity and gas bill paying by direct debit. Consequently, the government has announced a £9.1bn (€10.8bn) Energy Bills Rebate to support households with rising global energy prices. The Energy Bills Rebate will provide around 28 million households with an upfront discount on their bills worth £200 (€238).
The price cap is updated twice a year and tracks wholesale energy and other costs. Previously, in October 2021, the regulator increased the energy price cap for a dual bill over the 2021-2022 winter period (October 2021-March 2022) by 12% for those on default tariffs paying by direct debit and 13% for prepayment customers.