By Adria Calatayud
U.K. energy regulator Ofgem said Wednesday that it will cut its price cap on default tariffs this winter due to lower wholesale costs.
Ofgem said the cap for retail customers will be lowered to 1,179 pounds ($1,434) from GBP1,254 for the six-month period starting Oct. 1. The prepayment meter cap will fall to GBP1,217 from GBP1,242 a year for the same period, it said.
This follows significant declines in wholesale energy price between February and June due to a combination of low demand during the winter, strong gas supply and healthy storage levels, Ofgem said.
"This means the energy bills of around 15 million customers on default deals or prepayment meters will fall this winter to reflect the reduction in cost of the wholesale energy," Ofgem Chief Executive Dermot Nolan said.
The U.K. introduced energy price caps at the start of 2019, after criticism of high prices being charged by the U.K.'s "Big Six" energy suppliers--Centrica PLC British Gas, SSE PLC, Electricite de France SA (EDF.FR), E.ON SE, Innogy SE Npower and Iberdrola Scottish Power.
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