British energy bills will rise by more than 100 pounds as energy regulator Ofgem announced Thursday to raise price caps.
In an Ofgem's statement, the levels of the default tariff price cap will increase by 117 pounds to 1,254 pounds a year and pre-payment meter cap by 106 pounds since April 1 due to higher costs.
Dermot Nolan, chief executive of Ofgem, said: "Under the caps, households on default tariffs are protected and will always pay a fair price for their energy, even though the levels will increase from April 1."
"We can assure these customers that they remain protected from being overcharged for their energy and that these increases are only due to actual rises in energy costs, rather than excess charges from supplier profiteering,"Nolan added.
Consumers association Which? tweeted that "This eye-watering increase to the price cap will be a shock to the system for people who thought that it would protect them from rising bills".
British think tank Adam Smith Institute said that all caps failed.
Daniel Pryor, head of programmes at the Adam Smith Institute, said that "the government should learn from global evidence that shows price caps do not work for consumers".
"The international evidence is clear-price caps hurt competition, discourage innovation, reduce switching rates and ultimately punish people struggling to heat their homes with higher energy bills,"Pryor said.
Claire Perry, energy and clean growth minister, responded that "As Ofgem has said, these increases reflect the sharp rise in gas and electricity costs. The cap is designed to ensure energy companies offer good value to their customers and continue to thrive as an efficient business."
"With over 60 companies and more than 200 tariffs to choose from, consumers can always shop around for a cheaper deal and make big savings by switching," Perry said.
Editor:Cherie
