Energy bills - possibly 40% up this winter!!!

Mandark

BBC reporting this as lead story. Notice letters out this August. Energy companies hit by huge wholesale price increases. It's starting to get a bit scary with this and the food price increases. Huge US crop failure this year too because of the floods.
http://news.bbc.co.uk/1/hi/business/7461635.stm

withabix

I'm glad I changed over to the Scottish Power Fixed Until Feb 2011 tariff last week!

leo~saphira

bloody typical - we sorted out a new payrise at work and this increase will more or less wipe it all away after Gordon Brown takes his share

juniper1

I have been looking at my Gas & Elec charges today as we have come off a capped rate in Feb. Scottish Power have only given me 2 options. Withabix you are lucky that you have got a capped rate until 2011. They have only offered me a deal until July next year or I can fix the price I am paying today (which I think is high even though I am an online billing customer) until August 2009. If prices are going to rocket later in the year, is it best to fix?? What does anyone else think?

withabix

juniper1 wrote: »

I have been looking at my Gas & Elec charges today as we have come off a capped rate in Feb. Scottish Power have only given me 2 options. Withabix you are lucky that you have got a capped rate until 2011. They have only offered me a deal until July next year or I can fix the price I am paying today (which I think is high even though I am an online billing customer) until August 2009. If prices are going to rocket later in the year, is it best to fix?? What does anyone else think?

If you manage your account online, check that you can't actually still get the Feb 2011 fix. It wasn't available on the phone when I switched, but it was still on their website after the login page.

EDIT: I've just logged in and the Fixe until 28th Feb 2011 is STILL AVAILABLE to existing customers.

It's expensive compared to current rates, but it won't be soon!!

No penalty for opting back out of it either.

Premier_2

Looking good!

Only last week, Martin was reporting that industry experts were expecting prices to rise by as much as 45% by the end of this year (Jan 2009 at the latest)
http://www.moneysavingexpert.com/utilities/you-switch-gas-electricity

(I'm sure I read somewhere recently prices were to rise by up to 50%)

If the current belief is that prices will now rise by no more than 40% by the end of the year, perhaps the tide is turning


Edit: I'm sure Martin's article linked to above originally said 15% - 50%, as per the email sent 28-May-2008
http://forums.moneysavingexpert.com/showthread.html?p=11278689

Cardew

The irony is that with all these customers on fixed rate tariffs, the increase for others will be considerably higher to compensate.

I fixed my prices with BG in 2005 and it will stay fixed until April 30th 2010, and I guess a sizeable percentage of BG's customers did the same, and also took their other fixed rate deals.

The companies simply cannot lose here. They 'need' to raise an extra £xxx million in revenue and if, say, half of their customers are on fixed rate tariffs, then the other half will foot that bill.

Premier_2

You don't think the energy supply companies are funding these fixed rate offers do you, Cardew?

These are normally established by the energy companies buying energy on the futures market at a pre-determined rate. The people taking the risk here are the traders/speculators. If you are buying at a fixed rate, the chances are its because the energy supply company has bought at that rate (less a bit for their own profit) for supply at a date in the future. That's why offers are withdrawn early if too many customers sign up.

tara747

I am on a prepay gas meter, if I buy lots of extra units before the price goes up will I get it at the cheaper rate?

Zazen999

Personally, I think they are spinning this so that when they hike them by 20% they will get a pat on the back for keeping it down. Meanwhile prices have risen by 20 flipping percent.

Cardew

Premier wrote: »

You don't think the energy supply companies are funding these fixed rate offers do you, Cardew?

These are normally established by the energy companies buying energy on the futures market at a pre-determined rate. The people taking the risk here are the traders/speculators. If you are buying at a fixed rate, the chances are its because the energy supply company has bought at that rate (less a bit for their own profit) for supply at a date in the future. That's why offers are withdrawn early if too many customers sign up.

I am aware of the futures market in commodities and how it operates.

So I will turn your question back on you:

Do you really believe that, for example, BG got anyone to underwrite in 2005 their gas/electricity supply for the 5 years ahead at a modest increase of a few percent?

BG are of course owned by Centrica who produce gas/electricity.

Or that NPower/SP etc have got a syndicate to underwrite for the forthcoming 3 years at virtually the same price as it is today?

So if gas/electricity could be bought(guaranteed) from these 'traders/speculators', for the 3 years ahead, at the price they are making it available on the fixed tariffs, why is it forecast that prices will rise 40 -50% this year. Could it just possibly be that the futures market is indicating such a rise?