Energy Price Cap Explained
The energy price cap is set by the regulator Ofgem and limits the unit rates and standing charges suppliers can charge customers on default (variable) tariffs. It does not cap your total bill.
The cap is updated every 3 months (Jan, Apr, Jul, Oct) and is based mainly on wholesale gas and electricity prices over the prior observation window.
What the cap actually limits
- Maximum unit rate (p/kWh) for gas and electricity.
- Maximum daily standing charge per fuel.
- Applied per region — rates vary across the 14 licensed electricity distribution regions in Great Britain, operated by six ownership groups.
What the cap doesn't do
- Cap your total bill — use more, pay more.
- Apply to fixed-rate tariffs.
- Guarantee the cheapest price — fixed deals are often lower.
- Apply in Northern Ireland — Ofgem's household price cap covers England, Scotland and Wales only. Northern Ireland has a separate energy market and regulatory arrangements.