According to Octopus Energy’s CEO, since providers have already covered the cost of the gas, bills will be due in April.
Greg Jackson, the CEO, told the BBC that the new energy price cap will be “hundreds of pounds lower” than present levels when speaking to reporters at the World Economic Forum in Davos.
He also mentioned that supplies of gas had been reserved well in advance of the winter. According to Mr. Jackson, this has caused wholesale prices to drop.
His remarks coincide with the fact that bills for millions of people are expected to increase, as January statements now show the current price cap that went into effect at the beginning of the month.
The maximum amount that suppliers can charge homes for each unit of energy they use is set by the energy price cap.
The average dual-fuel yearly home bill will increase by £94 in January, from £1,834 to £1,928 according to energy regulator Ofgem.
The fact that Europe’s gas storage levels are above estimates is partly due to a mild winter.
The research firm Cornwall Insights predicts that lower wholesale prices will cause a typical household’s yearly energy expenditures to drop by £268 in April to £1,660.
Mr. Jackson stated there were numerous reasons to be concerned about tensions and “huge issues in the world” when questioned about the potential effects of tensions along the vital Red Sea route, but he was still optimistic that prices will drop.
“The energy we’re buying right now for the next few months, is coming in as the among the cheapest it’s been for the last few years, so of course there are so many problems in the world, but certainly in the short term energy prices look like they’re actually going to be coming down and stabilising.”
Following US and UK bombings in Yemen in response to recent Houthi rebel attacks on ships in the Red Sea, oil prices surged by 4%.
For the first time this year, Brent crude hit $80 (£63) per barrel as the rebels supported by Iran threatened to respond against any military action taken by Western nations.
Despite an increase, the price is still lower than it was during Russia’s invasion of Ukraine.
The British government is concerned about the impact of the ongoing attacks on Red Sea ships on the nation’s still shakily growing economy.
Coinciding with the cooling of inflation could be a jump in energy costs. In the meantime, the price of transporting containers on ships has increased, which means businesses may decide to charge customers for this service.
According to Prime Minister Rishi Sunak, “major disruption to a vital trade route and [higher] commodity prices” were the results of the attacks.
