The energy regulator said reviewing the price cap for household bills every three months would allow it to “adjust much more quickly” to market volatility. Energy prices rose last year as the global economy recovered from Covid-19 lockdowns. The invasion of Ukraine in late February caused prices to rise further as Western allies sought to economically isolate Russia, a major supplier of natural gas and oil. The negative effects of energy price rises have been felt around the world and in the UK it revealed a system of cap prices that was “not suitable for the kind of market we have today”, said Jonathan Brearley, the head. Ofgem executive. The regulator has increased the average dual fuel tariff cap by 54% to £1,971 since April, the biggest increase since the cap was introduced in 2019. Consumers have been warned they face another big rise of just under £3,500 when the next cap – which will come into effect in October – is announced later this month. Analysts at Cornwall Insight have predicted the price cap is on track to rise to £3,615 a year from January, piling further pressure on households as the cost of living crisis intensifies. Raising the cap every three months instead of every six months will mean prices rise more quickly for consumers to reflect higher wholesale prices – as well as falling more quickly when they do. Ofgem has faced some criticism over the timing of the move, which will mean consumers will pay more this autumn if, as expected, wholesale energy prices remain high. Brearley defended the move and said it would prevent more suppliers from failing, whose costs are indirectly passed on to consumers. The National Audit Office said the failures of 28 energy firms during the crisis will cost consumers £2.7 billion. “Because of Russia’s actions, because of increased demand across Asia, we’re seeing an unprecedented increase in prices in the wholesale market,” he told BBC Radio 4’s Today programme. “And we’re also seeing huge volatility and huge change in a short space of time . “The price cap may well rise if costs rise, and I would caution against too many predictions of change. These predictions are difficult to make. But equally when prices fall, the price cap will fall just as quickly.” Subscribe to the Business Today daily email or follow Guardian Business on Twitter @BusinessDesk Brearley added: “I know the changes we’re seeing don’t feel fair to anyone, but these are ultimately due to the changes we’re seeing globally in the price of gas and that’s not a British problem. This is a global problem.” He also said Ofgem was looking at flat charges, the flat fee for connecting to the grid regardless of how much energy is used. Prepaid cash users, many of whom are described as more vulnerable by anti-poverty campaigners, pay particularly high fixed charges and the regulator has faced calls for months to take action to reduce fixed costs. Ofgem is “putting forward proposals in the coming weeks”, Brearley said.