British energy regulator Ofgem said its price cap for average household energy bills would rise by about 21 percent to £4,279 pounds ($5,170.74) a year from January to the end of March 2023.
Households, however, will not pay this amount as Ofgem's price cap has been superseded by a government backed price guarantee set at 2,500 pounds a year for average consumption until the end of March 2023.
Ofgem's announcement means the government action will save typical households around 1,779 pounds a year, compared with the level they would have needed to pay under the regulators cap.
The government price guarantee rises to an average £3,000 a year from April 1 until the end of March 2024.
The cost of wholesale gas has increased, especially since Russia’s invasion of Ukraine in late February, and the price that suppliers need to charge per unit of energy has gone up sharply, prompting the government to step in and help consumers.