Shell Energy is the latest utility provider to increase prices
Shell Energy has joined other utility providers in increasing prices.
It has announced an average 12.23% increase to its price for gas and electricity across the UK, in line with the Ofgem price cap that was announced in August.
What is the price cap?
The Ofgem price cap has been in place since 2019 and was introduced to make sure that consumers pay a fair price for gas and electricity.
The cap limits the unit rate and standing charge that energy suppliers can charge for their standard tariffs.
It’s reviewed every six months and the latest increase to the cap will now come into effect on October 1st.
The increase takes the cap to £1,277 – a £139 increase on the previous cap announced in April 2021. In October 2020, the cap was set at £1,042, so it’s risen by £235 in just a year.
As a result of the higher cap, a raft of energy firms have announced hikes to their prices.
Gareth Kloet, of GoCompare Energy, said: “We have now seen most of the larger providers increase their tariffs to follow the Ofgem price cap, and while some of the smaller suppliers are yet to change their prices, we are now seeing some of the newer fixed rate deals being set above the price cap.
“For example, Shell Energy’s two-year fixed deal is now £1,352 which is £75 above the price cap, providing a strong indication of where the providers see the market moving in the next 12-24 months.
“This is a scary prospect for some bill payers who might already be on a tight budget – they are already facing an extra £235 on their bills in 2021, and 2022 doesn’t look much better if we are to go on these fixed rate deals that are being introduced.
“There are still a number of providers such as Utility Point and Pure Planet who have yet to increase their prices and some of the smaller suppliers are still cheaper than the Big Six, but the energy market is facing higher costs as a whole and it’s unlikely that we will see the tide turn in the near future.
“We would absolutely recommend checking your energy bills to make sure that you aren’t overpaying for your gas and electricity. It doesn’t take long to do and could prevent you from paying even more in 2022.”