What will price cap be per kwh in October?

recci

So what will the price cap be in October per kwh if it rises another 42%? That will be about 38 to 40 pence per khw? And no doubt an increase to standing charges.

So let's break this down: I was on The People's energy and was paying 0.14p up until October 2021 and within one year it's going to go to 0.40p, that's a 185% in a single year.

% Increase = Increase / Original Number × 100.

In what world is this sustainable?

I cant understand why there is not riots on the streets about this. 

GingerTim

The standing charge is unlikely to go up by more than a few pence, thankfully.

Mstty

I suspect electricity will go up roughly 30% and gas 50%. Give or take a few percent to make up the 40% then the rest on standing charges.

Best guess as of today and previous price cap increase distribution of increases.

QrizB

Mstty said:

I suspect electricity will go up roughly 30% and gas 50%.

Whatever happens, gas is likely to rise by a bigger % than electricity does. If you look at the table at the back of the Ofgem letter to the Treasury, almost all the increase is due to the wholesale price of energy increasing.

The current capped price of gas is about 7.4p/kWh. 4.9p of that is due to the wholesale price, and 2.5p due to "everything else". For electricity, the capped price is about 28.3p/kWh, made up of 16.6p for wholesale energy and 11.7p for everything else.

Let's imagine, for the sake of it, that the 72% increase in wholesale energy prices that Ofgem is forecasting in that letter applies equally to gas and electricity.

• Gas - 4.9 x 1.72 = 8.4 + 2.5 = 10.9p/kWh (an increase of 47%)
  
• Electricity - 16.6 x 1.72 = 28.6 + 11.7 = 40.3p/kWh (an increase of 42%)

This isn't a perfect answer; I've ignored VAT (part of the "everything else") for example. But it shows how gas is more sensitive to wholesale price changes than electricity is, due to the retail price being more closelty coupled to the wholesale one.

Ultrasonic

recci said:

So what will the price cap be in October per kwh if it rises another 42%? That will be about 38 to 40 pence per khw? And no doubt an increase to standing charges.

So let's break this down: I was on The People's energy and was paying 0.14p up until October 2021 and within one year it's going to go to 0.40p, that's a 185% in a single year.

% Increase = Increase / Original Number × 100.

In what world is this sustainable?

I cant understand why there is not riots on the streets about this. 

There is a reason that the government announced the pretty significant package of support last week...

In terms of the next price cap increase bear in mind that the headline figure that gets quoted is for allegedly 'typical' usage for a combined gas and electricity bill. The percentage increases for each fuel will almost certainly be different (likely higher for gas). What they will actually be will depend what happens to prices over the next couple of months so we don't don't have certainty on this yet.

(You mean 14p not 0.14p BTW.)

recci

It is electricity that's the big spend in my house. The gas heating is only on 4/5months of the year. I have a 4ft marine reef fish tank and working from home on a desktop pc and my son is on the xbox 16hrs a day lol. These price rises will destroy the fish-keeping hobby. Three shops have shutdown already in my area.