Key stocks to watch amid Ofgem gears to drop its energy price cap

February 28, 2023 11:54 AM GMT | By Manu Shankar
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  • Office of Gas and Electricity Markets (Ofgem) announced it would be slashing the energy price cap by about £1,000.
  • That said, even with the reduced costs, the bills could still rise by £500 on average.
  • According to Cornwall Insight, the energy regulator could reduce the cap to about £3,295. 

Energy consumers in Britain finally seem to have some good news as the regulator Office of Gas and Electricity Markets (Ofgem), on 27 February, announced that it would be slashing its energy price cap on the amount energy suppliers can charge by about £1,000.

The energy regulator indicated that the cap on the amount suppliers could charge for energy for average dual fuel, direct debit customers would fall by 23% for the three months from 1 April to £3,280, from £4,279 for the January to March quarter. 

Energy prices have steadily risen in the United Kingdom throughout the last year amidst the Russia-Ukraine battle. However, with moderate weather conditions, the energy dependence seems slightly reduced. This has resulted in Ofgem slashing the amount the energy suppliers were charging from consumers. That said, even with the reduced costs, the bills could still rise by £500 on average as the government's additional support only protects the consumers partly from paying the full price cap. 

According to a forecast from energy consultancy Cornwall Insight, the energy regulator could reduce the cap to about £3,295.

The price cap was initially launched in 2019 by the regulator as a temporary measure to deal with the problems of energy markets. The cap was previously deemed more expensive than the fixed-rate deals, and most consumers were forced to stay on them largely due to the ending of fixed terms or suppliers being forced to shut shop.

Ofgem chief executive Jonathan Brearley indicated that even though the wholesale prices have dropped, that has not been ,falling to the same level as the Energy Price Guarantee. He added that the decision could bring a major shift to the wholesale energy prices. However, Brearley was hopeful that the energy prices might not touch the levels seen during the energy crisis.  

Amidst this, Kalkine Media explores three energy stocks which investors can keep a keen eye on.

Diversified Energy Company PLC (LON: DEC)

The FTSE-250 constituent Diversified Energy Company is a gas and oil creation organisation focused on acquiring and enhancing onshore gas, and oil-producing assets and related midstream properties in the United States. The DEC share on 28 February was down by 0.48% at GBX 104.30. The Diversified Energy Company Plc had a market cap of £ 883.43million, with its EPS at -0.41 as of Monday. However, its one-year returns have given its investors returns of -8.41%.

Shell plc (LON: SHEL)

The shares of Shell plc was down by 0.08% at 10:10 AM (GMT) on Monday and were trading at GBX 2,534.50. With a market cap of £ 175,814.99 million, the oil and gas-making firm had positive one-year and YTD returns of 26.79% and 9.00%, respectively. SHEL had an EPS of 2.59 with a Turnover (on book) of £ £33,099,088.86.


Primarily operating in Ireland and the United Kingdom, SSE Plc is an FTSE-100 constituent. SSE Plc on 28 February was trading at GBX 1,762.00, down by 0.14% at the time of writing. With a market cap of £ 19,071.51 million, the multinational energy company had positive one-year and YTD returns of 5.37% and 3.10%, respectively. SSE had an EPS of 2.87 with a Turnover (on book) of £ £2,441,910.87.


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