The price cap is currently updated twice a year and tracks wholesale energy and other costs. It was last updated in August, so the current level does not reflect the unprecedented record rise in gas prices which has since taken place.
This saw the collapse of numerous consumer energy providers as they could not afford to continue to purchase energy at wholesale cost while charging customers less than they bought it for.
Over the last year, 29 energy companies have exited the market or been put in special administration in the wake of soaring global gas prices, affecting around 4.3 million domestic customers.
Ofgem has now opened a consultation on a proposal to switch from half-yearly to quarterly price cap updates and reducing the advance notice for new tariffs to take effect.
“We are consulting on a number of changes to the price cap methodology in response to the recent unprecedented rise in wholesale market prices and volatility,” it said.
In September...