Ofgem and the price cap.

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Hi all.
The way I understand it............at the beginning of this month (January 2019) Ofgem set a price cap for customers who were on their suppliers standard tariff, and pay by direct debit. I meet both of these criteria, and it's also a dual fuel tariff, which may also be a condition of the price cap.

My energy supplier is Avro energy, who have been an excellent supplier for the last 16 months, with no problems at all. When I joined them I was on a twelve month fix at £103 p/m. This ran out in October last year, when I was then moved to their standard tariff. When I looked into switching tariff, or supplier, Avro again came out cheapest, although there was a monthly increase of £25. I have looked at them again this week and the deal is still there, but now the price cap has come into effect by the regulator.
I know that Ofgem will review the price cap twice a year, and are expected to put it up in April, and potentially again in October.
Basically the maths are this:
Currently I pay 12 x £103 = £1236
If I take the new offer I'll pay 12 x £128 = £1536
The price cap is currently £1137 although likely to rise.

I don't understand why I'm told it's better for me to fix, when, if I stay on the standard tariff, I'm already paying more than the cap. What have I missed? and how does it work? Once the energy company reach the threshold of the price cap, do I pay less? Do I start to be in credit with them? Do I have to pay it and then take a refund the following month? or is the whole thing just another con. It's too hard to work out, and I can't seem to find the rules of it anywhere.

Comments

  • PennineAcute
    PennineAcute Posts: 1,161 Forumite
    First Post First Anniversary Name Dropper
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    The price cap is not a price cap as such. It was a maximum that can be charged using a set figure for gas and electric usage. If your usage is greater, then you pay more.
  • Flt._Lt._Biggles
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    Imdamian wrote: »
    Hi all.
    The way I understand it............at the beginning of this month (January 2019) Ofgem set a price cap for customers who were on their suppliers standard tariff, and pay by direct debit. I meet both of these criteria, and it's also a dual fuel tariff, ....

    I didn't get any further, but I see you joined us in 2015 albeit this is your first post

    May I suggest you consult a comparison site to find the best deals for you.
    It may well be that dual fuel is not the cheapest soloution
  • Imdamian
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    The price cap is not a price cap as such. It was a maximum that can be charged using a set figure for gas and electric usage. If your usage is greater, then you pay more.
    Thankyou. That's exactly what I couldn't get my head around. :-)
  • Imdamian
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    I didn't get any further, but I see you joined us in 2015 albeit this is your first post

    May I suggest you consult a comparison site to find the best deals for you.
    It may well be that dual fuel is not the cheapest soloution

    Maybe I haven't wanted to post, fearing that it may attract snarky comments! Can't think why I might think that! Just because I haven't posted in the forum, doesn't mean I haven't visited or used the site. :-P
  • Flt._Lt._Biggles
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    Imdamian wrote: »
    Maybe I haven't wanted to post, fearing that it may attract snarky comments! Can't think why I might think that! Just because I haven't posted in the forum, doesn't mean I haven't visited or used the site. :-P

    Maybe?
    Or maybe not, eh? I'm sure you have visited the site plenty of times before ... and used it. ;)

    Still, feel free to report me and get another helpful poster removed from this site. :cool:
  • Imdamian
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    Haha. Helpful? …..Hardly!
    It was a genuine question on something I didn't understand.
    I've no need to report you though. I'll treat it with the disdain it deserves and move on. ;-)
  • Flt._Lt._Biggles
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    Imdamian wrote: »
    Haha. Helpful? …..Hardly! ..

    I fully agree with you. This is far from helpful to anyone ... unless they came to MSE to save money :cool:
    ...
    May I suggest you consult a comparison site to find the best deals for you.
    It may well be that dual fuel is not the cheapest soloution
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