Ofgem's current price cap currently sits at £1,138, but this could increase by up to £150 come August, according to Comparison Technology's Director of Energy, Tom Lyon.
In August Ofgem will announce its bi-annual energy price cap, and market indicators suggest it could increase by up to £150. If this occurs, it will result in the highest price cap ever recorded which will see the average annual cost of standard variable tariffs (SVTs) sky-rocket.
The suspected price rise comes as a result of what has been happening in the wholesale energy market this year, with gas prices rising 55% since January and are now at their highest level since 2005 - and they continue to rise.
Will the price cap affect me?
If you're on a standard variable tariff then yes, when the new price cap is announced it will affect how much you pay for your energy. On an SVT your price-per-unit of energy can fluctuate with the market, much like interest rates with a variable mortgage. Don't panic, you can fix the price you pay per unit of energy by switching to a fixed deal.
As it stands, 400 fixed energy deals are coming to an end, and if the customers on these deals do not re-switch to a new fixed deal, they'll be put on a default SVT, which could see their annual energy prices jump up by an average of £300.
As we've said, avoid major price hikes by switching to a fixed energy tariff to ensure you continue to pay a fair price for your energy.