Prime Minster Rishi Sunak is being urged to “scrap the price cap” as energy bills continue to remain too expensive for millions of households.
Energy industry regulator Ofgem confirmed the cap would drop from £2,074 to £1,923 on October 1 for around 29 million homes.
The price cap is the limit on a unit of gas and electricity with standing charges also being taken into account.
It should be noted that this is not a cap on someone’s overall energy bill which is still dependent on their consumption.
Despite the price cap dropping, experts are highlighting that standing charges have risen to over £300 and vital Government support, such as the £400 energy bill grant, is no longer available.
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In light of this, Mr Sunak’s Government is being called to “scrap” the get rid of Ofgem’s price cap as it is “no longer fit for purpose”, according to 100Green CEO Doug Stewart.
His comments come after research carried out by the energy supplier found that one in six homeowners are not aware of the fall in energy prices.
Some 33 percent of those polled by 100Green shared they were only “vaguely” aware of the fall in energy costs.
The survey highlighted that nearly two-thirds of households are looking into changing their energy deal to a fixed tariff.
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Mr Stewart cited that, initially, the energy price was was only supposed to be a temporary initiative.
He explained: “The Government should scrap the price cap: it’s never been a cap, and in its current guise, it’s not doing what it was designed for
“They should allow suppliers who are financially robust to set prices in line with their hedging strategies but keep the ban on acquisition-only tariffs.
“Acquisition-only tariffs are solely targeted to gain market share, and offer unsustainable prices, which generate losses for the companies that offer them.”
According to the energy expert, the collapse of the UK energy market can be attributed to this issue.
The CEO added: “This is ultimately what brought about the demise of 30 poorly funded suppliers in 2021 who used this model for growth. The public are all now paying the price – literally.
“We need to return to suppliers being free to set prices, but support this with rigorous regulation to prevent a return to the race-to-the-bottom price mentality, which encourages price gouging when fixed term cheapest-price contracts come to an end.”
