// BBC BUSINESS NEWS — FINANZA
What will the energy cap changes mean for my bills?
Typical annual energy bills will rise by £60 to £1,723 in October, under regulator Ofgem's latest energy price cap.
The increase of around 4% in the cap affects millions of people in England, Scotland and Wales, and reflects higher wholesale gas costs which have been pushed up by the US-Israel war with Iran.
The energy cap fixes the maximum amount which customers on standard variable tariffs can be charged for each unit of gas and electricity used.
It covers around 33 million households in England, Wales and Scotland and is set by the regulator Ofgem every three months, external.
around 7 million pay by standard credit (they pay when they get a bill)
Most of the increase in the energy price cap is driven by higher gas prices. Gas bills are rising by 8%, which means households that do not use gas will see an energy bill increase of less than 1%.
The government's decision to remove VAT from domestic electricity bills has also affected the new price cap - Ofgem says the typical annual bill would have been £45 higher without that cut.
While Ofgem's director general for markets Neil Kenward said the price rise for October to December was technically 3.6%, Ofgem always rounds the number which is why it publicised the 4% figure.
The typical annual usage figure applies to the first category: dual-fuel households on a standard variable tariff which pay by direct debit.
But customers' actual bills depend on the amount of energy used and how they pay for it.