(Reuters) – Britain’s domestic energy price cap is expected to fall in April, reflecting a significant decline in wholesale energy prices since mid-November, analysts at Cornwall Insight said on Wednesday.
Cornwall Insight forecasts Ofgem’s price cap will in April fall to 1,660 pounds ($2,100.90) a year based on average use, down 14% from 1,928 pounds a year set for the price cap taking effect in January.
The consultancy’s latest April forecast is below a previous prediction of 1,929 pounds made in November.
“The recent stabilisation of international energy markets has trickled down to April’s price cap predictions, raising hopes that this downward path will continue throughout the remainder of 2024,” said Craig Lowrey, Principal Consultant at Cornwall Insight.
The consultancy is forecasting the price cap to drop further to 1,590 pounds in July before a slight increase to 1,640 pounds from October.
Contrary to initial concerns, the Israel-Hamas conflict and problems such as the potential LNG production strikes in Australia has so far failed to materially impact energy supplies, Cornwall Insights said.
In addition to concerns over further pipeline disruptions similar to the Finnish Balticconnector rupture have waned and a relatively mild winter to date should leave European gas storages well-filled, they added.
However, ongoing consultations on potential changes to the price cap, including the standing charge and bad debt collection, could impact the overall price cap level, Cornwall Insights said.
($1 = 0.7901 pounds)
(Reporting by Nora Buli in Oslo; Editing by Louise Heavens)