The news that there would be a price cut was not unexpected. Energy price caps are announced quarterly. As reported here, the Spring (April-June) price cap rise was announced in February – the third since the Labour Government was elected in July last year on the promise of “lower bills”. “Energy bills are set to rise again due to a spike in global gas markets,” claimed Ed Miliband ahead of Ofgem’s February rise. But there is no such thing as “global gas markets”. And that “spike” had already passed.
A post-pandemic low price of gas on UK markets had occurred in February 2024 at around 56p per therm (29.3 kWh). But over the next year, this price increased to 142p, peaking on February 11th. On February 25th, Ofgem announced a 6.4% price cap increase for the second quarter of this year. But by the time of Ofgem’s announcement, a mere fortnight later, the price had fallen to 106p – a fall of 25%. Into the second quarter, the price fell further, reaching a low of 69p – or less than half of February’s spike price – on April 7th. The price then stabilised at around 83p (around 42% of the peak price).
