Energy prices should start to drop early next year, according to regulator Ofgem.
Speaking to the Business and Enterprise Select Committee Ofgem, chief executive Alistair Buchanan said he was putting pressure on companies to pass on price cuts to customers.
Since the summer, when oil prices reached a record high of $147 per barrel of oil, energy companies have raised their prices by about 30 per cent.
Starting in July EDF raised its gas prices by 22 per cent and electricity by 17 per cent. The firm was followed by the remainder of the Big Six companies, with British Gas setting the highest rise of 35 per cent for its gas tariff.
Crude oil is now trading at about a third of what it was at its peak and the regulator is urging companies to bring their prices down accordingly.
Mr Buchanan said: "We would expect those prices to come off early in the New Year."
Earlier he said that the regulator had not found any evidence that the energy companies were operating as a cartel.
Even as energy prices drop, households can still make savings on their bills by being energy efficient.
Homes can apply for free or half price insulation under a government scheme, which received £100 million from Chancellor Alistair Darling yesterday.
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