U.K. energy regulator Ofgem said Friday that it has raised the country’s price cap by 80% to £3,549 ($4,200) a year, and warned that prices could get significantly worse through next year.
The new price cap for a dual-fuel, direct-debit customer represents a £1,578 increase from the current £1,971, reflecting significantly higher gas and power prices.
The rise will come into force from Oct. 1.
“The price of energy has reached record levels driven by an aggressive economic act by the Russian state. They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy. Ofgem has no choice but to reflect these cost increases in the price cap,” Ofgem Chief Executive Jonathan Brearley said.
Ofgem said earlier this month that the energy price cap will be updated quarterly going forward rather than every six months as was previously the case.
The change was intended to reduce the dislocation between wholesale and retail energy prices in Britain, which last year contributed to a large number of suppliers going bankrupt. The price cap reflects the actual cost of supplying energy to households.
Last summer, the price cap for the typical customer stood at £1,138.
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