Despite a price reduction beginning in July, experts predict that energy costs will remain elevated.
After the regulator lowered the energy price limit for England, Scotland, and Wales, a typical household will pay £2,074 per year for gas and electricity beginning in July, £426 less than at present. It signals the end of government assistance that has capped expenses at £2,500. However, it is not anticipated that prices will decline significantly over the remainder of the year, and there is a possibility that they may rise in the winter.
Martin Lewis of MoneySavingExpert stated that by the end of the year, people will pay approximately the same amount as they did last winter, despite the fact that prices have decreased and the government discount of £400 will no longer be available. He added that people will continue to pay double what they did before the energy crisis.
Kate Mulvany, a senior consultant at the energy analysis firm Cornwall Insight, stated that further substantial decreases in bills were unlikely, especially if there was a severe winter across Europe and the United Kingdom was competing with other nations to purchase energy.
Our projections indicate that until the end of this decade, prices will be higher and more volatile, which regrettably will have an effect on domestic bills, she told sources. Ms. Mulvany stated that she anticipates prices to decline beginning in the 2030s if investments in renewable energy continue.
This week, Qatar's energy minister cautioned that the "worst is yet to come" for gas shortages in Europe, implying that prices may increase further. There are hopes that the decline of the price ceiling below the government-guaranteed level will result in the return of market competition, allowing consumers to shop around for the best price.
But Mr. Lewis stated that he did not anticipate firms to promptly announce new offers, with energy companies instead offering existing customers customized deals and no new market-wide deals.
Jonathan Brearley, the head of the energy regulator Ofgem, implored those having difficulty paying their bills to contact their provider. "It is unlikely that prices will return to pre-energy crisis levels in the medium term," he added.
In England, Wales, and Scotland, the regulator determines the utmost price that can be charged per unit of gas and electricity to households on variable or default tariffs.
Since October, it has been replaced by the government's Energy Price Guarantee, which has resulted in an annual gas and electricity charge of £2,500 for the average household, but this will expire at the end of June. During the winter, the government provided a £400 discount on everyone's energy expenses. This discount expired in April.
The majority of households do not use an average quantity of gas and electricity. Bills are based on the amount of energy a household actually consumes, which varies based on the number of occupants, the type of dwelling, and the property's energy efficacy.
The average household calculations are based on a direct debit customer consuming 12,000 kWh of gas and 2,900 kWh of electricity annually. A kilowatt-hour is a unit of energy that is used to determine your bill. National Energy Action, a charity, estimated that despite the reduction in the price limit, 6.5 million people would still be in fuel poverty.