Does the price cap affect me?
The energy price cap is backstop protection from the government, calculated by Ofgem.
It applies if you’re on a , whether you pay by direct debit, or a .
If your supplier has stopped trading and you are switched to a new supplier you are likely on a price capped tariff.
It won’t apply if you:
- are on a
- have chosen a standard variable green energy tariff Ofgem has exempted from the cap.
Contact your supplier to check if you are on their default tariff.
Checking your rate and saving on your bills
The price cap limits the rates a supplier can charge for their . These include the standing charge and price for each kWh of electricity and gas (the units your bill is calculated from). It doesn't cap your total bill, which will change depending on how much energy you use.
The table below shows the average price-capped rates for a customer with typical usage paying by direct debit.
Average price cap unit rates
Customer with typical usage, paying by direct debit*
Last price cap period
(1 October 2021 - 31 March 2022)
Current price cap period
(1 April - 30 September 2022)
£0.21 per kWh
Daily standing charge: £0.25
£0.28 per kWh
Daily standing charge: £0.45
£0.04 per kWh
Daily standing charge: £0.26
£0.07 per kWh
Daily standing charge: £0.27
*Rates are averages and will vary by region, payment method and meter type. Contact your supplier for personalised information.
Suppliers can't charge you more than the cap we set and we monitor suppliers to make sure their default tariff rates comply.
The global rises we’re seeing in gas prices mean this is a very challenging time. Right now, this may mean you find few better value tariffs than being on a supplier’s default rate covered by the government’s energy price cap if you are already on one. But it’s always worth signing up to alerts and keeping up to date on market changes and your energy use. That way you can be confident you’re getting the best price possible and saving energy where you can.
If you are worried or struggling to pay your energy bills, contact your energy supplier as soon as possible. We’re working closely with energy companies to make sure they support you in any way they can. Our rules mean you can ask to agree payment plans and you may be eligible for extra help through grants and services.
What’s happening to fuel bills?
Energy bills are made up of a number of costs. They’re not just the gas and electricity you use. They include wholesale costs which make up the majority of a customer’s bill. Learn more about them in costs in your energy bill.
Right now, we’re seeing a once in a 30-year event with volatile gas prices affecting everyone around the world.
As a result, costs suppliers pay to buy energy on the wholesale market (their ‘wholesale costs’) have risen sharply.
We entered winter at prices of around £1.80 a therm for suppliers to buy a unit of gas and peaking at over £4.00 a therm, against a more typical price of £0.50 a therm. We are currently seeing prices for summer, usually £0.30 a therm now at over £2.00 a therm.
Because gas is used for electricity generation this pushes up retail electricity bills as well as retail gas bills.
Wholesale cost increases have put suppliers under extraordinary strain and some have not been able to weather the impact. Since January last year, 29 suppliers serving 4.3 million households have exited the market in Great Britain.
When a supplier stops trading, the market absorbs the cost of taking on the exiting supplier’s customers. This passes costs onto all of us as energy consumers and is among the reasons why the current price cap level is increasing from April.
What's Ofgem doing?
Our role in Ofgem is to work for you as a bill payer - making sure you pay no more than is necessary as part of our duty as regulator.
Our experts are working around the clock for you to watch the market and make sure we set a fair price cap reflective of the global situation. Government is also doing their part with the support on offer.
We’re also doing other things to help stabilise the market over the longer term to reduce our reliance on gas and help protect customers from similar price shocks in the future. This includes measures like getting powers so we can update the price cap more frequently than once every six months if there is significant volatility.
What's happening to standing charges?
Standing charges are a daily fixed amount we pay suppliers for our gas and electric. It varies by region due to the different costs to transport power to where we live.
The charge pays for costs that are fixed for a supplier on a per customer basis. This includes service administration fees, connections to and maintenance of the energy network and government schemes to help reduce carbon emissions and fuel poverty.
This is a difficult time in the energy market, with volatile prices to buy energy on the wholesale market affecting all our bills.
While the rates we pay for standing charges and the units of energy we use are commercial decisions for suppliers, if you're on a default energy tariff - your supplier's standard variable offer - Ofgem sets a cap on your rates. This is to make sure what consumers are charged is a fair reflection of supply costs and no more than absolutely necessary. And if costs fall, you see this passed on in your charges from suppliers.
Suppliers can decide how they structure their standing charges within the cap Ofgem sets, as long as the overall tariff structure does not lead to default tariff customers paying above the relevant cap level.
We're working around the clock to make sure the cap fairly reflects the global situation.
The cap increase this April reflects a number of factors:
- When an energy supplier goes bust, these costs are split across the standing charge and unit rate you pay for each unit of energy used. The global rises we’re seeing in gas prices mean this is a very challenging time and quite a few suppliers have left the market.
- Changes to improve the fairness of how costs are distributed to maintain the energy network have increased. However, we expect these increases will benefit you as consumers overall as improvements are being made across your networks.
- The amount Government charges per customer for its support schemes has gone up - this includes a Green Gas Levy to help us look at alternative energy sources to gas and costs associated with the Warm Home Discount scheme.
If you’re on a fixed-term tariff, the standing charge is fixed for the length of the contract. If you’re on a default tariff covered by the energy price cap, suppliers can amend it throughout the year as long as your charges don’t go above the cap Ofgem sets.
It's best to contact your supplier for personalised information on your tariff. That's because different factors also affect how much suppliers charge. This includes where you live, how you pay (prepayment, direct debit or standard credit) and your type of energy meter.
Your energy usage will affect your total bill too.
Costs influencing the energy price cap
Around 22 million households are on a supplier’s standard . These rates are protected by the energy price cap, which Ofgem calculates.
In February and August we review the maximum rate suppliers in England, Scotland and Wales can charge these customers for summer and winter.
We look at the underlying costs to supply energy and set a cap to make sure the rate you pay only reflects legitimate costs suppliers have to provide energy. Companies cannot afford to supply electricity and gas to their customers for less than they have paid for it. The cap is not a price subsidy, and we need to ensure it reflects the true cost of energy so the market can operate.
This is how the cap keeps prices fair for you. If costs drop it guarantees that you see this in your rates. If they rise, you will see your charges rise no more than is necessary.
But it means this April we need to set the latest level of the cap to allow companies to pass on the legitimate higher costs they have.
Wholesale gas price costs in the energy price cap
Pence per therm
Data sets behind this graph are proprietary and can be sourced from ICIS.
Wholesale electricity price costs in the energy price cap
Pounds per megawatt hour
Data sets behind this graph are proprietary and can be sourced from ICIS.
Here you can see a breakdown of the cost elements influencing the cap we set. The charts reflect the current average cap for a dual fuel customer with typical usage by payment method.