UK energy regulator lowers price cap for the summer

Feb 7 (Reuters) - UK's energy regulator said on Friday the price cap for bills will fall by 17 pounds to 1,162 pounds during the summer, as wholesale energy prices have declined in the last few months.

"A strong supply of gas, such as record amounts of liquefied natural gas and healthy gas stock inventories, has been the main factor pushing down wholesale prices," Ofgem said.

Ofgem, citing a drop in wholesale prices, lowered the cap last August as well by 75 pounds.

The regulator, which reviews the price cap every six months, also said it would carry out a review this summer on whether the market conditions exist for the default price cap to be lifted or be extended past the current year.

Ofgem has been under intense scrutiny to control price increases, with parliament having said a couple of years ago that customers were being overcharged for electricity and gas.

On Friday, Ofgem said the caps protect around 15 million customers from being overcharged, with the new cap set to take effect from April.

Ofgem calculates the cap using a formula that includes wholesale gas prices, energy suppliers network expenses and costs of government policies, such as renewable power subsidies.

Britain's energy market is dominated by big six suppliers - Centrica's British Gas, new entrant Ovo Energy that took over SSE's retail arm, Iberdrola's Scottish Power, Innogy's npower, E.ON and EDF Energy. (Reporting by Muvija M in Bengaluru; Editing by Bernard Orr)