Are energy price falls imminent?

Wywth

With the fall in crude oil prices being reflected in lower fuel prices at the pumps (and a lower inflation rate), when will we start to see gas & electric price drops?

The industry were quick to put prices up when crude oil prices rose (citing the link between oil and gas prices in Europe). Now crude oil is falling in price, how long will it be before gas and electricity prices fall?

Is this, therefore, currently a bad time to opt for fixed energy prices?

MillicentBystander

I believe the 'price of gas is inextricably linked to the price of oil' theory only applies when the oil price is increasing...

PS On a serious note maybe opt for the EDF price fix with no exit fees? Only problem is IT'S EDF :eek::D

NPowerUser

My GOFIX5 tariff ended on 31st May 2012 with npower.

I could have switched now but I have decided to sit on my hands for the time being as like you, I think we are in for some sharp falls in gas and electricity prices this winter.

Not just falling oil prices but demand will fall across Europe as austerity bites, people will use less as they simply cannot afford to use the same as before.

The days of ramping up prices 10%-20% are over in my humble opinion in the current climate.

grahamc2003

NPowerUser wrote: »

My GOFIX5 tariff ended on 31st May 2012 with npower.


The days of ramping up prices 10%-20% are over in my humble opinion in the current climate.

Really? Well I think they are almost built in.

Iirc, elec bills are about 42% wholesale costs, the rest various other things (the cost of running their business, referral payments, green costs, windmill and other subsidies, profit, distribution etc). The other 58% of costs are of course rising at a great rate of knots.

Soon our bills will be loaded with costs associated with the new Nuclear build, which is unavoidable. You may get the odd token tariff at a cheaper rate for a few takers, but in general, expect bills to rise 15/20%pa for several years yet. Imv, since this is a smokestack industry with little real competition, any benefits from lowered oil price will go mainly to increasing margins of the generating arm (i.e. wholesale costs in the suppliers' books won't drop significantly).

undaunted

Imminent price reductions eh, was that a gang of



that I just saw go by?

A.Penny.Saved

undaunted wrote: »

Imminent price reductions eh, was that a gang of



that I just saw go by?

lmao too true. It won't happen. The best that will happen is prices won't rise so much later this year. I don't think fixing is a bad move for consumers. I would do it but EDF :eek:

Terrylw1

Are prices solely linked to oil though? What about the massive waste costs some of these companies have?

Wywth

Terrylw1 wrote: »

Are prices solely linked to oil though? What about the massive waste costs some of these companies have?

I don't know, but they didn't refer to these when they felt complelled to increase prices due to the souring cost of crude oil in the past.

Wouldn't any waste in the direct cost of supply vary in proportion to the raw material cost in any event?

The industry did state that gas prices were linked to crude oil prices within Europe. They also claimed that as so much electricity is generated using gas, then electricity prices were also similarly linked.

At least that's how I understood their argument at the time

wakeupalarm

18 month low in the price of oil
http://uk.finance.yahoo.com/news/brent-ends-18-mth-low-191243420.html

Where are the energy companies with their price cuts?

Pincher

Do unto them as they unto us.

They try to start rumours about prices going up, so we are panicked into fixing at silly high prices.

We need to start a rumour about a secret energy suppplier that is just so much better, on price and service and panic the energy companies into polishing up their act.

Let's call it Omega Ltd. The last company you will ever need.

Terrylw1

Wywth wrote: »

I don't know, but they didn't refer to these when they felt complelled to increase prices due to the souring cost of crude oil in the past.

Wouldn't any waste in the direct cost of supply vary in proportion to the raw material cost in any event?

The industry did state that gas prices were linked to crude oil prices within Europe. They also claimed that as so much electricity is generated using gas, then electricity prices were also similarly linked.

At least that's how I understood their argument at the time

I think this is a hidden factor. Its easy to say its all about fuel costs but if a company is wasting hundreds of millions, that becomes a factor. Once they fix this waste as other large companies have, it significantly increases their profit.

I think Ofgem should be health checking these companies because if the improve their business, does that increased profit benefit their customers, or do they get to pocket it because we all get told its all about oil?

Whilst we have these media reported costs, we also have a settlement process where the suppliers have 14 months before energy is settled. Through this time, it can change constantly until fixed ready for the 14 month point, so surely costs to the customer could also be more fluid?

It just seems to me that we don't hear the full story.