Gas prices: If I have a fixed energy contract, will my bill go up?

The cost of living is skyrocketing for millions of households across the UK, and the latest announcement on energy bills brings no relief to those strapped for cash.

Regulator Ofgem has confirmed that the energy price cap will rise to £2,017 for prepayment meters. It’s from £1,309.

And if you’re not on a prepaid meter but on a standard tariff, the average bill will drop from £1,277 to £1,971 under the new cap, which will come into effect for both from April.

But what if you are on a flat rate? How it works? And will I have to pay more following Ofgem’s announcement? Here’s everything we know.

Gas prices: If I have a fixed energy contract, will my bill go up?

Households and customers with fixed rate energy bills can breathe a sigh of relief, for now.

While you’re on this tariff, you won’t pay a penny more because your bill has been fixed at what was agreed between you and the supplier.

However, when that flat rate ends, you’ll likely notice that finding another deal costs a lot more.

The reason gas prices have risen so much for consumers is that suppliers have to pay a lot more to get the energy in the first place because wholesale prices have risen sharply.

Over the past few months, households and customers have been largely shielded from any increases due to the capping of energy prices.

But when that amount is increased in April, providers will be free to raise their prices on standard tariffs, which will put additional pressure on households when other costs also rise.

Chancellor Rishi Sunak, however, announced a new “rebate and clawback” scheme aimed at allaying concerns about rising energy costs.

He promised a £200 cut on energy bills from October, with people paying the money back in £40 increments from 2023.

There will also be a £150 rebate for those in council tax brackets A to D, which should help around four in five households.

Of course, much of this government action is based on the hope that wholesale gas prices will fall over the next year, but they might not.

Rising demand from Asia, ongoing tensions in Ukraine and the depletion of wind and nuclear electricity inventories could continue to put pressure on wholesale gas prices.