Ofgem CEO Dermot Nolan has warned that there may be a “significant” jump in the standard variable tariff price cap which is due for review next month.
The review will fix the level of the cap, initially introduced at £1,137, for the period through to April.
At Ofgem’s “Energy of the Future” conference (10 January), Nolan said: “Wholesale costs have risen significantly over the past year. As a result, it is likely we will announce an increase, potentially a significant one, on the level of the cap.”
Any uplift would result from the “actual costs of supplying energy”, not profiteering, he assured the audience.
Wholesale energy costs rose sharply in the latter half of 2018, are a key input to the level of the cap within Ofgem’s methodology.
Taking questions later in the conference, energy minister Claire Perry stated customers covered by the cap will still be “tens of pounds” better off than without it.