Subsidising household energy bills will cost the government at least £16 billion over the first three months of next year, according to new estimates.

Ofgem said that a typical household would have seen their annual bills hit £4,279 a year from January were it not for the government’s energy price guarantee, which was introduced in October and limits tariffs so that a typical household will not pay more than £2,500 a year until April.

The government will pay the differential to energy suppliers to enable them to cover their costs while charging customers the lower prices.

Household energy usage is typically highest in the first quarter of the year, when about 45 per cent of domestic gas consumption takes place to heat homes through

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