[brooksby]

Can someone please explain how the energy price cap works.

Specifically: in what way is it a “cap”?

I read that the price cap is increased, then will be increased again, and so on and so forth.

I also read that the energy companies’ profits have been increasing massively.

So, in what way is the energy price cap what the chap on the Clapham Omnibus would understand to be a cap (ie. a limit)?

Topic

[brooksby]

hirsute wrote:

(22 posts to go before you get your free road.cc socks !)

???  I’d assumed if I hit 10K posts then I break the site or something…

[TheBillder]

The idea was to protect
The idea was to protect people who had either never switched from the old gas and electricity board tariffs, or were coming off a fixed price, from punitive costs caused by ignorance of switching or inertia. It could never insulate people fully from global price hikes without regulating the entire energy process.

The most interesting thing was how the policy developed within the Conservative Party. When suggested by Ed Milliband, it was Dangerous Socialism. By the time of the next election, it was Tory policy. Odd.

[Sniffer]

The companies digging the oil

The companies digging the oil and gas out of the ground made lots of money from the rise in price of fossil fuels, but a whole load of energy suppliers went bust in the last year.

I would suggest buying gas on the wholesale market and selling it to consumers hasn’t been that profitable.

[Hirsute]

I think that is the basis for

I think that is the basis for a windfall tax.

Not sure if the profit is going up in % terms though but in £s it’s going up a lot.

(22 posts to go before you get your free road.cc socks !)

[brooksby]

If the energy suppliers’

If the energy suppliers’ profits are increasing at a greater rate than that at which prices are rising, I’m not convinced that the energy price cap is working…  (from the point of view of a consumer sitting on the Clapham omnibus).

[Hirsute]

Martin Lewis is the goto

Martin Lewis is the goto

https://www.moneysavingexpert.com/utilities/what-is-the-energy-price-cap/

“The price cap was introduced on 1 January 2019 by regulator Ofgem, with the aim of preventing the millions of households on certain expensive variable tariffs from being ripped off.”

“The price cap sets a limit on the maximum amount suppliers can charge for each unit of gas and electricity you use, and sets a maximum daily standing charge (what you pay to have your home connected to the grid).”

 

[Author]

Replies