Is Now the Time to Switch or Cap? Currently with Scottish Power...

pnq06

Afternoon All,

I'm absolutely useless when it comes to understanding all the gas/elec jargon so I do apologise if these seem like silly questions ( ) but can someone please help me decide what to do?

Basically I have just received an email from Scottish Power saying that our "Discounted Energy Offer" is coming to an end at the end of June and do we want to cap for another year at an extra charge of £2 (£1 for each fuel).

Question is- Do we want/need to cap again? Is anyone else capping? Is the simple answer, that we'll be paying a fixed rate each month?

I've read through Martins article and he basically says there is a risk if you do it now as there might be more cuts but then SPs offer is only on till the end of June....

Also can anyone on SP tell me if "Discounted Energy online NSC" is the same product in his article as "Scottish Power Online Discounted Energy 01/09/08 +35% +12.4%" which is really quite high compared to others at the moment. So if thats the case, would it be cheaper to switch and not cap

Would appreciate it if anyone can help And give yourself a pat on the back if you understood any of my post :beer:

Premier_2

pnq06 wrote: »

...
Question is- Do we want/need to cap again? Is anyone else capping? Is the simple answer, that we'll be paying a fixed rate each month?

I've read through Martins article and he basically says there is a risk if you do it now as there might be more cuts but then SPs offer is only on till the end of June.... ...

I would counter that with the possibility of prices rising, which is presumably the reason you capped prices last time.

With a capped rate, hopefully prices under the capped rate will fall if there is a general price reduction, but they are guaranteed not to rise above the specified cap should there be a general increase. You will have to pay the £1 charge per energy - consider this the insurance premium if you like.

Will prices rise, fall or stay the same? Who knows?

Oil prices are currently rising. Last year a rise in oil prices drove energy prices higher. This year they haven't reduced reail energy prices despite a fall in oil prices because the energy companies now say that wholesale prices only account for 50% of the retail price, and rises in the other 50% the retail price pays for has offset the saving.
With rising oil prices, wholesale prices will rise. What's the bet that will lead to a rise in retail prices?
What's the chance of a fall in retail prices when wholesale prices are rising as well as the other costs associated with supplying the energy?