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The cap is only going up because govt support is lessening. At the moment the “cap” as it used to be called should be at £3.5-£3.7k when it was last set in November 22 for Jan-Mar 23, however because of govt intervention (called energy price guarantee or EPG), the price we pay as consumers is subsidised by the govt to bring the representstive household price down to £2.5k. Come April EPG support from govt will be lessened which will feel like the “cap” is increasing however it’s not, just the govt being less generous with the subsidy to households.
However with the fairly rapid fall in the past few months of wholesale energy prices there’s a lot of talk that suppliers will soon be able to offer fixed rate tariffs again that’s less than the EPG rate of £3k. April may be the trigger, as that’s when EPG support lessens.
On the “are energy companies making a killing”; only if you’re a produce of energy (BG, Shell, EDF etc) who can sell energy at a higher wholesale rate. Energy suppliers still need to buy energy from someone and they are still paying wholesale prices, but are only allowed to charge the EPG price to consumers hence the govt subsidy to keep prices for consumers lower than they would be without support.
C4r1s-
I think my issue is that current wholesale costs are someway below the cap. That's why the Octopus tracker is consistently cheaper at the moment and requires zero EPG support to achieve that.
I suppose the cap is set over a longer term to reflect hedging by suppliers - but right now energy is cheaper than the fixed tarrifs most people are on. I think.
Scrabble
Did see a rumour that theyve shut the door. Think with them bringing all of bulbs customers over and everyone waking up to this tracker they have been swamped.
It's all very odd though. How come there is one energy company out there offering a tariff that is soo much less than everyone else - and yet it still seems the tariff cap is going up in April?
Are all the energy companies now making a killing? How is this what's going on?