MSE News: Huge energy price cuts 'unlikely'

torbrex

EDF very conveniently anounce a drop of 5% in their gas prices as of February once the high usage period is almost over.

No matter that the wholesale price has dropped by 22%

Paulgonnabedebtfree

"However, any decrease will be a token gesture rather than anything meaningful as suppliers will have bought the lion's share of their requirements for this winter and summer already and much of this will have been at higher prices than we are seeing today. Any price decrease will be welcome nonetheless."

I have a token gesture for the energy companies too. I'm just not sure how many fingers to use.
If Scottish Power do reduce, I will be watching like a hawk to check how they handle the more expensive, early units that went up 56% for gas in one jump.
If they take the pee, I will be off - though the rest aren't any better.
I can't decide if this situation is a cartel (illegal) or a quasi-cartel (immoral). To be a cartel I think they actually have to directly communicate with each other.

A friend of mine has cut off his own gas (at the meter) and gone all electric. He wears a coat on the colder nights to avoid using heating. He uses a Berco boiler for hot water, never uses the bath except for showers and has a , a halogen oven and a microwave to supplement the main electric cooker. You might normally expect all electric to be more expensive but with the extortionate price of the early gas units, it is viable for him.
When he switches in order to get his switching fee, he will still switch both fuels though. There's no rule to say that you have to use the gas supply. It also avoids the need to get the gas boiler serviced and checked.

Pincher

"The company did not announce any cut to the price of its electricity bills, which rose by 4.5% in November."

Only gas is down 5%, after peak winter usage.

Michael_Nottingham

Surely this article completely misses the point about the differences between small independent firms and the Big Six

"Smaller firms tend to buy their power much closer to the time they sell it to us so can react quicker to wholesale falls."

Small firms cannot either get the credit or afford to hedge their purchases forward a long time - so have to buy close to when they sell it, they don't have a choice.

While this may favour them at times of the wholesale market is dropping, at times of rising prices, they will have to increase their prices first or take the profit hit.

This is why you often see new companies joining the market as wholesale costs drop but often see casualties as wholesale costs increase

RHYSDAD

I'm just glad I got my woodburner going. Although it still needs feeding with fuel it's a darn sight cheaper than gas. We haven't needed the central heating since 14th December....