Energy price cap - what's the future

Consumerist
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So, from the PM's speech at conference, the Conservatives intend to cap energy prices.

Does this mean the end of better deals for those who switch tariff or supplier on a regular basis?

This could be bad news for regular switchers but on the plus side it could also mean that fixed deals might look relatively unattractive compared to variables. If more of us were on variable deals the energy suppliers would be less able to hold us hostage to those early-termination fees which prevent the market being competitive.

In the long run the energy cap just might make the market more competitive - something which Ofgem has singularly failed to achieve by it's petty tampering.
>:)Warning: In the kingdom of the blind, the one-eyed man is king.

Comments

  • Bark01
    Bark01 Posts: 881
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    the cap will be on standard tariffs, there will still be cheaper tariffs available but they will become more expensive.

    No way will it make it more competitive. Competition is based on price, all this do will mean the price differential is a lot less. Which will give people less reason to switch.

    I very much doubt the cancellation fees stop the vast majority of people from switching.

    Wholesale costs are only going one way so variable tariffs make less sense for consumers.

    Variable fixed period or traker tariffs can have cancellations fees too.
  • System
    System Posts: 178,077
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    Bark01 wrote: »
    Wholesale costs are only going one way so variable tariffs make less sense for consumers.

    .

    Wholesale costs only account for about 40p in every £ that we spend on energy. If they doubled overnight, your bill would only increase by 20%. Governments are keen to blame everyone but themselves. The primary reason that electricity has increased over the past year is because of a massive increase in Social and Economic costs which includes smart metering. Will this political initiative work - I have my doubts? That said, it makes for good political headlines.
  • Consumerist
    Consumerist Posts: 6,310
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    Bark01 wrote: »
    . . . I very much doubt the cancellation fees stop the vast majority of people from switching.

    Wholesale costs are only going one way so variable tariffs make less sense for consumers.

    Variable fixed period or traker tariffs can have cancellations fees too.
    Cancellation fees are still a disincentive to switch i.e. anticompetitive, in my view.

    Wholesale costs may be going up at the moment but in the long run that may not always be the case. It could be while, though, before that changes.

    I don't know of any variable-rate tariffs which currently carry an early-termination fee.
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
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