Zog - fix for 1 year or 2 years?

SamDude

My Zog fixed tariff is coming to an end in 50 days and Zog has emailed me to renew.

I'm with Zog for gas, and my Mercury 12 v40 tariff (paying 2.647p Unit rate, and 17.850p Standing charge).
I've been keeping a check on the energy situation, having been a PfP customer for electricity and currently attempting to dodge British Gas and go back to Neon Reef.

Anyway, gas - I'm considering the 12 month or 24 month fixed tariffs:

• Mercury 24 v37 (4.96p/unit)
• Mercury 12 v51 (5.88p/unit)

I'm curious why the 24 month fix is cheaper than the 12 month?
Is this because the current price increases are expected/forecast to cool off next year?
(or is it suppliers hedging over the long term so charge less?)

QrizB

What's the exit fee from the 24-month deal, and how much gas per year do you use? Is it worth fixing for the longer period to get the 0.92p/kWh lower rate, then pay the exit fee if prices fall significantly?

Neil_Jones

Most Zog exit fees are £30.

As a general rule the longer the fix the higher the price as its often an indication of where they think price is going to go.  You may infer that the price (to buy) will peak next year and be lower in two years time.

Of course Zog's variable tariff at this time wipes the floor with the rest of their offerings, but that situation probably won't be the case for long and of course isn't guaranteed.

Remember Zog do have their Saturn tariff, which is 12/24 month fix but with no exit fee.  You pay slightly more because of the lack of fee but you have a get out of jail clause if prices do fall.

Of course even if prices fall dramatically there is nothing to stop you moving anyway.  If you can save more than the exit fee it may be a bit of a no brainer for a cheap fix.

[Deleted User]

If I was switching today I would be looking at Zog’s variable tariff at 3.339p/kWh (my region). I switched last month to a Zog 2 year fix at 3.19p/kWh so you can see how fixed prices have increased. That said, most analysts are predicting that prices will fallback next year: a new Russian pipeline to Germany is due to come online in February (if not earlier)

Neil_Jones

I switched back in June to a gas tariff with a unit rate less than 3p per kWh. That was a two year fix then.  As it turned out  it was quite a jammy decision, as the tariff vanished two days later.

SamDude

Thanks all. My concern with the variable tariff is that if (when) prices go up (very soon?), the fixed offers will go up too - and I'll miss the boat on fixing at the current deals.

The difference between Mercury and Saturn for me is that Mercury is £15 less per year but it has a £30 exit fee (where Saturn has no exit fee).

If I go for the variable, it will be £53/month and the 2year fixed is £62/month. I can live with the £9 month extra (which is likely to be absorbed and overtaken when non-fixed prices increase).

I'd rather stick with a Mercury fixed deal (and hedge my saving on not needing to exit early), so I'm leaning towards Mercury 24 v37.

Neil_Jones

Stop looking at direct debit amounts.  That's not your bill.  Your usage is your bill.  See meter readings on the statement/bill Zog send you.  Your monthly payments just go into a kitty with your name on it.

QrizB

SamDude said:

I'd rather stick with a Mercury fixed deal (and hedge my saving on not needing to exit early), so I'm leaning towards Mercury 24 v37.

If you use 10,000kWh of gas over the next 12 months you'll save £92 on Mercury 24 vs Mercury 12. That will more than cover your exit fee.

BUFF

[Deleted User] said:

 a new Russian pipeline to Germany is due to come online in February (if not earlier)

Construction finished, just waiting for the Germans to certify it. Of course, it has been suggested that the Russians may use gas supply as an economic  weapon ...

SamDude

Neil_Jones said:

Stop looking at direct debit amounts.  That's not your bill.  Your usage is your bill.  See meter readings on the statement/bill Zog send you.  Your monthly payments just go into a kitty with your name on it.

Yes I understand - I was simplifying my options, my home usage is around 12000-13000 KWh (above average unfortunately).

SamDude

QrizB said:

SamDude said:

I'd rather stick with a Mercury fixed deal (and hedge my saving on not needing to exit early), so I'm leaning towards Mercury 24 v37.

If you use 10,000kWh of gas over the next 12 months you'll save £92 on Mercury 24 vs Mercury 12. That will more than cover your exit fee.

Thanks, yes this is what I've been looking at - it will be a slightly higher saving because we're at 12000KWh+ usage... (gulp)