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Energy cap clarification

The government’s proposed cap on energy prices for business and domestic consumers is expected to be £211 per megawatt hour for electricity and £75 for gas.

However, it’s still not certain whether this is simply the energy cost or whether it also includes distribution charges and other levies raised by the government – and UKFM has been pressing for clarification on this point.

The government says that discounts should be applied automatically and will take affect from October 1, even if the scheme is finalised later. However, if a fixed price contract was agreed before April 1 2022, no discount or cap will be applied.

The scheme will be in place for six months, with a review in the next three months to see if there should be a follow on scheme, what it might look like, and which businesses should benefit.

UKFM has already begun discussions with government officials and will be working with others in the food sector to try to avoid a new “cliff edge” at the end of March 2022. We’ll keep you informed of developments.


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