MSE News: Is British Gas planning a price drop?

Former_MSE_Guy

This is the discussion thread for the following MSE news story:

"What does 2010 hold for energy prices? There's talk of British Gas lowering bills this month which could spark a price war, but some experts think we've already reached the bottom of the market ..."

Read the full story:
Is British Gas planning an imminent price drop?

Premier_2

Is there some confusion here between what prices people are referring to?

Retail prices on the whole (less any specific recently introduced tariffs) have remained stubbonly high i.e. at the same price as when wholesale prices peaked.

Wholesale prices may now have reached the the bottom, having fallen significantly since their highs ... but retail prices haven't yet reduced similarly.

Whether retail prices will reduce is a big question, and one that has been posed since the energy companies failed to decrease prices in line with the change in wholesale prices, yet were quick to increase them at the time of increasing whoilesale prices.

There were reports as long ago as December 2008 that the government may act to force energy companies to cut their prices to reflect the fall in wholesale costs, unless the companies did so voluntarily
http://www.dailymail.co.uk/news/article-1096823/Government-threatens-law-change-force-power-firms-cut-fuel-prices-fail-act-first.html

Cardew

So, is it worth swtiching?
Martin Lewis, MoneySavingExpert.com founder, says: "Predicting the energy market is difficult. One thing that is certain is that by switching, where average household bills are around £1,200 a year, the cheapest online tariff pays around £900 a year for the same thing.
"If British Gas does drop standard prices it is very unlikely to come close to those cheap tariffs so there is no harm switching as long as you're not locked in if the market drops."

The problem is that virtually every attractive tariff has a penalty for leaving before a set date, or you need to remain on the tariff for 12 months to get the big discounts.

No doubt this is to to deter 'tarts' switching for cashback.

NeverInDebt

How can ' we've reached the bottom of the market." my energy prices didnt fall one bit last year despite BG standard tariff dropping a little

flashnazia

Well, this might be a hint that they might drop (but more than likely it's a !!!! up).

BG have DECREASED my direct debits by so much so that they don't cover my annual usage.
I looked on their site for how they set DDs and found this:

We calculate your Direct Debit by looking at:

• Your last meter reading
• Your previous years energy consumption
• The long-term weather forecasts
• And current energy prices

If they have worked out my DDs correctly it would indicate that they have decreased them because they are planning on decreasing the unit prices...

I won't hold my breath for that one though, more likely they cocked up my DD calculation!

Pincher

Dropping prices when it gets warm is the oldest trick in the book.

So keep an eye on the long term weather forecast, and

Beware The Ides of March.;)