Energy suppliers have experienced a 15% rise in their costs over the past year, according to energy regulator Ofgem.

The watchdog cited increases in wholesale gas and electricity prices for the rising costs revealed in Ofgem’s new Supplier Cost Index.

The regulator noted that the index does not take into account the impact of longer-term hedging strategies.

Fall in gas much larger than electricity

Ofgem explained: “The steep rise in the second half of 2016 follows a long period of falling costs between the start of 2014 and early 2016.

“Reductions over the period were much larger for gas than electricity.

“The index remains below its level at the start of 2014.”

In May 2015, Ofgem suspended its monthly Supply Market Indicator (SMI) to carry out a review of its approach to providing information to improve transparency about the factors behind energy prices.

It launched the Supplier Cost Index following that consultation.

> See the Supplier Cost Index