I received an email from my energy supplier this morning telling me that as ofgem have raised the price cap they are putting my prices up. According to the wiki page “Its primary duty is to protect the interests of consumers, where possible by promoting competition.” Yet the increase seem counter intuitive to this.
In: Economics
Utility companies in the UK buy their supply of energy approximately six months in advance of supplying to the end user. The price cap is set at level appropriate for the time the energy is bought, but won’t be supplied for six months. If three months ago the energy was more expensive for the utility companies to buy, in three months it’s going to be more expensive to deliver to the user. The pride cap reflects this.
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