The energy regulator has reduced its price cap, saving some 15 million households £17 a year, but largely maintaining its position for another six months.
The majority of households will now have their energy bills capped at £1,162 per year from April, while those with pre-payment meters will not have to spend more than £1,200 a year.
Introduced by Ofgem last year, the cap is intended to protect customers by providing fair energy prices.
Thanks to a warm winter and an abundance of gas, wholesale prices have plunged to their lowest point in more than 12 months, leading some to speculate that the price cap might be cut by up to £60.
However, Ofgem said that while the price of raw materials for energy bills had dropped by £38 to £408 between August and January, those savings had been offset by added costs from Government-imposed renewable obligations on energy suppliers that are passed on to customers.
Jonathan Brearley, the regulator’s chief executive, said the cap had saved consumers £1bn on their energy bills, but added that shopping around for a better deal could save them even more.
In recent years, the energy market has been flooded with small suppliers offering cheaper deals in an attempt to undercut big players such as Centrica and EDF.
As wholesale costs have fallen, the so-called Big Six energy firms have joined this race to the bottom, slashing the costs of their tariffs to compete.
Research released this week suggested that just under a quarter of all the UK’s cheapest energy suppliers have gone bust in the past three years, calling in to question the sustainability of those companies still offering bargain electricity tariffs.