Fuel tariff

Philo555

I don't really understand how the fuel price cap works. 
I currently have a dual fuel tariff with British Gas that expires at the end of this month, should I opt for a new tariff or go with the standard variable rate for now? 

Mstty

Hi Philo and welcome to the forum.

Think of the price cap as the top amount energy companies can charge in different areas of the UK.

In the past it has generally been cheaper to get a fixed rate deal with your current supplier or shop around but that is no longer the case.

At this present time the energy the suppliers buy is costing them more money than the price cap(generally) so what happens is they try and sell you are more expensive fixed rate deal to cover their costs(exempt from the limits of the price cap)

The best thing to do at this current moment in time is to just stay on the standard variable rate and plan your finances and cut back on energy where possible.

Robin9

The general advice is do nothing and you will roll over onto the variable tariff.

Get ready for big bills well in excess of the 54%

Philo555

Thanks for that guys makes a bit more sense now 

Robin9

@Philo555  Lots of threads describing how costs can rise - have a good read. There are frightening figures but also good advice as to how you can reduce your consumption.

jimjames

Mstty said:

Hi Philo and welcome to the forum.

Think of the price cap as the top amount energy companies can charge in different areas of the UK.

Just to clarify this. The price cap isn't the top amount they can charge. If you choose a fixed rate it can be (substantially) more than the cap but the default rate the company offers cannot be above the price cap. Also the cap is the rate not the amount you pay so if you use more you pay more.

It's like saying the price of petrol is capped at £1.75 a litre but if you have a car and drive 100 miles you will pay more than someone doing 50 miles.

MWT

Philo555 said:

I don't really understand how the fuel price cap works. 
I currently have a dual fuel tariff with British Gas that expires at the end of this month, should I opt for a new tariff or go with the standard variable rate for now? 

Also , just to be clear, you will have seen a figure of 54% quoted as the price rise under the new cap, that will not apply to you.

As you are coming off of a fixed tariff the actual percentage rise between that and the current variable rate cap could be a lot higher than 54%.

Mstty

jimjames said:

Mstty said:

Hi Philo and welcome to the forum.

Think of the price cap as the top amount energy companies can charge in different areas of the UK.

Just to clarify this. The price cap isn't the top amount they can charge. If you choose a fixed rate it can be (substantially) more than the cap but the default rate the company offers cannot be above the price cap. Also the cap is the rate not the amount you pay so if you use more you pay more.

It's like saying the price of petrol is capped at £1.75 a litre but if you have a car and drive 100 miles you will pay more than someone doing 50 miles.

I did clarify this is you read further and don't just crop that paragraph? Have a read again jim

"At this present time the energy the suppliers buy is costing them more money than the price cap(generally) so what happens is they try and sell you are more expensive fixed rate deal to cover their costs(exempt from the limits of the price cap)"