Plummeting wholesale energy costs mean you could be paying £182 extra a year due to energy price cap

MILLIONS of households may be paying an extra £182 a year for energy bills after wholesale prices "plummet"- and suppliers haven't passed the savings on to bill payers.

A price cap introduced by the watchdog Ofgem limits the amount companies can charge for gas and electricity to stop customers on standard variable rate tariffs paying over the odds.

But a hike in April saw the cap rise by £117 a year - or 10 per cent - to £1,254 for SVRs and £106 to £1,242 annually for those who use pre-payment metres to combat rising wholesale costs.

The new figures were based on the average cost of energy between August 1 2018 and January 31 2019 which was was a huge £61.15.

That's a whopping 14.5 per cent more than the £52.26 wholesale prices suppliers paid at the end of May, according to market analysis by ICIS Power Index (IPI).

If suppliers passed the full savings on to customers on SVR tariffs then bills should drop to £181.83 but instead, most continue to charge the limit.

Some smaller suppliers have lowered prices, such as Igloo Energy, which cut tariffs by 3.5 per cent yesterday to £932.43.

But experts are calling for the cap to be lowered during August's review process that determines any changes that will come into effect from October 1.

Until then, customers will have to foot the bill.

Ofgem's cap has already faced criticism for hiking prices just three months after it was first introduced.

The Big Six energy firms have also been accused of "running a cartel" after they all hikes prices to the same amount.

But many feel that you can save more by switching suppliers and signing up to a fixed rate deal.

Tariffs can vary depending on where you live and how much energy you use to it's important to look around to find the best deal for you.