The energy regulator will conduct a consultation on how it caps bills, as many suppliers continue to struggle with increasing gas prices.

Thirteen energy suppliers have gone bust since the beginning of September, beaten by soaring wholesale energy costs and unable to pass costs to customers due to the restrictions of the price caps.

According to analysts cited by news agency Reuters, the difference between wholesale energy prices and prices that suppliers can charge is currently around £400 per customer per year.

In a letter to suppliers, Ofgem said: “The unprecedented and unexpected rise in gas and electricity prices over recent months has put energy markets under severe strain.

“We have been working with the government, the energy industry, and consumer bodies to manage the situation, protecting consumers during this challenging time.

“As this period of uncertainty continues, and the pressure on the sector grows, we are taking steps to protect the short- and long-term interests of consumers, providing greater certainty for investors and strengthening the resilience of the sector.”

The consultation will be launched in November and a decision on any changes will be published in February, when the next price cap will be announced but in time for any changes to be implemented before it comes into effect in April.

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The cap is calculated using a formula including wholesale gas prices, network costs, and costs of government policies such as renewable power subsidies.

It rose by 12-13% from October but wholesale prices have risen by much more since that cap was set in August.

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