Energy prices and price cap.

msskmy

If the price cap is expected to rise 40-50% in April and energy price units are predicted to rise 40-50% based on current prices it would not necessarily mean an increase in 40% total bill prices for some as the price cap includes the standing charge. Is it reasonable to assume the standing charge will also increase by 40%?

MattMattMattUK

msskmy said:

If the price cap is expected to rise 40-50% in April and energy price units are predicted to rise 40-50% based on current prices it would not necessarily mean an increase in 40% total bill prices for some as the price cap includes the standing charge. Is it reasonable to assume the standing charge will also increase by 40%?

No one is 100% sure until thr end of the reference period which closes at the end of January, however the best bet is that the price cap will rise by 51%, that will factor across unit costs and standing charges, although as the standing charge makes up such a small part of the overall bill it will make little difference overall.

booshya

msskmy said:

If the price cap is expected to rise 40-50% in April and energy price units are predicted to rise 40-50% based on current prices it would not necessarily mean an increase in 40% total bill prices for some as the price cap includes the standing charge. Is it reasonable to assume the standing charge will also increase by 40%?

Yes, on the predictions you have put forward, then your maths is absolutely correct.

Where do you get your predictions from?

savers_united

The numbers being floated are 8p for Gas and 30p for Elec based on the data to date, that would be approx 50% increase on current Elec rate and 100% increase on the Gas rate. Best wait a few more weeks and we should know what the new cap will be from April. 

QrizB

msskmy said:

Is it reasonable to assume the standing charge will also increase by 40%?

FWIW (which isn't much, I'm just a rando on the internet) I'm not expecting a significant rise in standing charges. However I'm expecting unit prices to rise by more than 40%, perhaps 50% for electricity and 100% for gas.

Edit: This post from MWT has the numbers:
https://forums.moneysavingexpert.com/discussion/comment/78711738/#Comment_78711738

msskmy

I am with octopus and have been offered the loyal octopus 1 year fix with a 8.4 rate on gas and 28.18 on electric & standing charges kept the same rate. This fix would mean a 25% increase in my total energy bill compared to the current SVT. It has been presented to me in such a way that it looks like a good deal compared to the 40-50% increase in bills being expected. I also was presented with a 1 year fix with gas 10 and electric 37- meaning a 45% increase from the SVR. On the other hand it does not seem to be to bad thing to stay on the SVR and accept a higher gas price when I will use less gas in the summer. I am a low energy user and hardly use gas in the summer but if the standing charges were to go up 50% paired with a rise of above 50% in electric charges it may make a difference in accepting a fix rather than stay on the SVR. Is there any reasonable expectation of how much the standing charge could be capped at or is there no limit when the energy companies have to recoup their losses.

bristolleedsfan

msskmy said:

I am with octopus and have been offered the loyal octopus 1 year fix with a 8.4 rate on gas and 28.18 on electric & standing charges kept the same rate. This fix would mean a 25% increase in my total energy bill compared to the current SVT. It has been presented to me in such a way that it looks like a good deal compared to the 40-50% increase in bills being expected. I also was presented with a 1 year fix with gas 10 and electric 37- meaning a 45% increase from the SVR. On the other hand it does not seem to be to bad thing to stay on the SVR and accept a higher gas price when I will use less gas in the summer. I am a low energy user and hardly use gas in the summer but if the standing charges were to go up 50% paired with a rise of above 50% in electric charges it may make a difference in accepting a fix rather than stay on the SVR. Is there any reasonable expectation of how much the standing charge could be capped at or is there no limit when the energy companies have to recoup their losses.

The only factor that I suggest you consider is known fact- changing gas to loyalty 12 month fixed would mean paying more than double for gas usage from time of change to when flexible octopus increases in cost which usually is a littke later than energy cap increase date, you said yourself you hardly use any gas in summer.

stevew01

Can Martin include in his investigation all of us who use oil as their heating fuel. In the last 18 months we have seen prices from 20ppl to the current figure of 66.2ppl for heating oil. For my typical annual use (2200 litres), the cost varies from £440 to £1456, over £1000 per year difference.

We are located in the countryside and do not have any gas. Closest gas is probably 7 miles away, so not comimg close anytime soon! Thanks

in_my_bumble_opinion

stevew01 said:

Can Martin include in his investigation all of us who use oil as their heating fuel. In the last 18 months we have seen prices from 20ppl to the current figure of 66.2ppl for heating oil. For my typical annual use (2200 litres), the cost varies from £440 to £1456, over £1000 per year difference.

We are located in the countryside and do not have any gas. Closest gas is probably 7 miles away, so not comimg close anytime soon! Thanks

First thing to do is join some local oil clubs.

I had a delivery today that cost 57.3ppl so I'm sure you could get similar.

QrizB

stevew01 said:

In the last 18 months we have seen prices from 20ppl to the current figure of 66.2ppl for heating oil.

That's not far off the change in mains gas prices, from ~2.5p/kWh in December 2020 to (probably) 8.4p/kWh in April 2022.

Considering that a litre of oil contains 10kWh of heat, oil has been (and will be) cheaper than gas.

Gerry1

QrizB said:

stevew01 said:

In the last 18 months we have seen prices from 20ppl to the current figure of 66.2ppl for heating oil.

Considering that a litre of oil contains 10kWh of heat, oil has been (and will be) cheaper than gas.

@QrizB Did you mean LPG?  If oil has become cheaper than mains gas and is likely to stay that way then that's quite a significant change.