Gas vs Oil price increase per unit (kWh) with the New Price Cap Increase

49 Posts

Hi,
So there's a recent announcement I'm sure you are all aware of that the price cap will go up by 80% by the first quarter of 2023 (70% by october) -
https://www.moneysavingexpert.com/utilities/what-is-the-energy-price-cap/
They says this is a strong prediction so is likely to be accurate. I can't find any specifics on kWh hour price increases; it's all reported by average annual increase per household. I have done the following rough sums and based on these wanted some advice on buying heating oil (as this is what we have):
Gas went from 4.07 to 7.37p per kWh which is an 81% increase.
Electricty went from 20.8p to 28.34p per kWh which is a 35% increase
The overall energy increase on average was reported as 54% in April.
Since it is going up by a further 80% in Q1 of 2023 that 1.5 times more than April's increase so:
81% increase in gas becomes 122% increase in gas bringing the price up from 7.37p to around 16.4p per kWh
35% increase in electricty becomes 52.5% increase in electricty bring the unit price up from 28.34 to about 43p per kWh
Do these calculations sound about right if it does go up by 80% come the start pf next year? This is NUTS. I am of course assuming the proportions of how much gas and electricity go up by is the same as in April which may not be the case?
Now to my main question. NRG have just quoted me 78p/L of heating oil for August. Online most sources seem to say 1L of oil with a modern boiler is 10kWh so 78p/L is 7.8p per kWh if this is correct. Is it therfore worth getting as much oil now as we can? What are other oil users thinking about these forecasts? If gas could be 16p per kWh in a few months and oil is about 8p currently seems prudent to invest what we can in getting as much oil as we can? I know oil doesn't doesn't follow the same pattern as gas and electricity prices but it always goes up in the winter and if electricity is soaring up as well I don't want to be stuck buying oil in the winter alongside mad electricity prices. I mean we have 1200L now and our tank has a 2500L capacity. We could make sacrifices elsewhere and buy more now. If the price caps were not due to increase I definitely would not be thinking about getting anymore oil until we run out. Would appreciate any advice and what other oil users are thinking. Thanks.
So there's a recent announcement I'm sure you are all aware of that the price cap will go up by 80% by the first quarter of 2023 (70% by october) -
https://www.moneysavingexpert.com/utilities/what-is-the-energy-price-cap/
They says this is a strong prediction so is likely to be accurate. I can't find any specifics on kWh hour price increases; it's all reported by average annual increase per household. I have done the following rough sums and based on these wanted some advice on buying heating oil (as this is what we have):
Gas went from 4.07 to 7.37p per kWh which is an 81% increase.
Electricty went from 20.8p to 28.34p per kWh which is a 35% increase
The overall energy increase on average was reported as 54% in April.
Since it is going up by a further 80% in Q1 of 2023 that 1.5 times more than April's increase so:
81% increase in gas becomes 122% increase in gas bringing the price up from 7.37p to around 16.4p per kWh
35% increase in electricty becomes 52.5% increase in electricty bring the unit price up from 28.34 to about 43p per kWh
Do these calculations sound about right if it does go up by 80% come the start pf next year? This is NUTS. I am of course assuming the proportions of how much gas and electricity go up by is the same as in April which may not be the case?
Now to my main question. NRG have just quoted me 78p/L of heating oil for August. Online most sources seem to say 1L of oil with a modern boiler is 10kWh so 78p/L is 7.8p per kWh if this is correct. Is it therfore worth getting as much oil now as we can? What are other oil users thinking about these forecasts? If gas could be 16p per kWh in a few months and oil is about 8p currently seems prudent to invest what we can in getting as much oil as we can? I know oil doesn't doesn't follow the same pattern as gas and electricity prices but it always goes up in the winter and if electricity is soaring up as well I don't want to be stuck buying oil in the winter alongside mad electricity prices. I mean we have 1200L now and our tank has a 2500L capacity. We could make sacrifices elsewhere and buy more now. If the price caps were not due to increase I definitely would not be thinking about getting anymore oil until we run out. Would appreciate any advice and what other oil users are thinking. Thanks.
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I had hoped the oil price would have fallen further a couple of months ago, following the immediate spike after the invasion of Ukraine. But it didn't.
I still think it will fall a bit more in the next 2 months, despite the weakening of the £ to the $, as pressure mounts on OPEC to assist. That being said, I doubt if we will se a return to the sub £0.50 levels from autumn last year.
Longer term forecasts on crude oil prices don't offer much comfort.
I bit the bullet in June and paid £0.94 per litre for 1200 litres to top up our 2500 litre tank. At the time, with all the uncertainty, it seemed like a good idea, but with hindsight I should have waited a bit longer.
In the same situation today, I think I would do the same again for peace of mind. Or watch the pricing like a hawk and place an order at the 1st sign of any increase!!
They haven't even put the standing charge up yet either.
I fully expect either the /litre price or standing charge (or both) to shoot up before our next fill though.
https://www.amazon.co.uk/gp/product/B08HLYLFFH/ref=ppx_yo_dt_b_asin_title_o02_s00?ie=UTF8&psc=1
No idea if it makes any difference, but I was always surprised how clean the nozzle and burner were on our old boiler when I serviced it up to a year ago. It may be snake oil, but for the cost it seems like a reasonable punt. Still using it with the replacement boiler and the deliveries we have had since it was installed.
dunsonh is quite right is saying nobody can predict the price, but I see no reason why it should follow the gas price, which if I understand geopolitics, has rocketed due to the uncertainty over supplies from Russia.
Different market drivers. If Russia turns off the tap, big problems. If OPEC get too greedy they will kill the golden goose.
From this website, Russia produces significantly more gas than oil : https://www.worldometers.info/gas/gas-production-by-country/
As @buff much worse than you thought.