Energy prices

[Michael Morris]

My last company was one of them to go bust (Green) I was paying £112 a month but now I've been switched by the Gov to Shell Energy and already I'm up to £183.00 a month going forward.

How the hell do you know what energy costs? So many variables.

[JamesWales]

I'm with shell energy and they were pretty reasonable when I moved in to my new place in July. Am building up credit on a monthly Direct debit of £63 a month (it's a two bed flat and I'm the kind of person to put a jumper on before the heating)

No doubt it will go up

However it's worth bearing in mind that gas prices have FALLEN massively in the last three months. They aren't as low as they were but they are down a long way from the peak of the crisis a couple of months ago. Obviously that rise needs to feed through the system as some would have been purchased at a high price, but still..

Hopefully a mild winter will see prices fall back to normal


https://tradingeconomics.com/commodity/natural-gas

[The Bloop]

The boss of Ovo energy was on tv the other day saying that he expects prices to rise throughout the year, and that consumers will be paying almost double what they were a few years ago.

[poc]

My last company was one of them to go bust (Green) I was paying £112 a month but now I've been switched by the Gov to Shell Energy and already I'm up to £183.00 a month going forward.

How the hell do you know what energy costs? So many variables.

call them and ask them to itemise and justify the monthly rise

[Gofer Blue]

I have yet to see a reasonable explanation for the huge rise in gas price. If the normal rule of supply and demand is applied, can anyone honestly say that there has been a huge increase in demand for gas? I don't see any evidence of a big increase in industrial output or demand for heating compared to 2 years ago before the pandemic hit.

[Grangenders]

I’m paying £75 a month on a fixed rate deal with British Gas which is up next month. They are offering me £140 for a new deal. The advice I’m getting is to go onto the variable rate but in April prices are scheduled to jump hugely again so I suspect I’ll be looking at £200 a month unless things change

[dml1954]

I’m paying £75 a month on a fixed rate deal with British Gas which is up next month. They are offering me £140 for a new deal. The advice I’m getting is to go onto the variable rate but in April prices are scheduled to jump hugely again so I suspect I’ll be looking at £200 a month unless things change

British Gas standard variable rates for gas and electric are currently considerably cheaper than any of the fixed rate deals they are offering. There is therefore no incentive to tie in to one of their deals. This doesn't make sense as it should be the other way around. The only conclusion I can come to is that most people will tend to just automatically renew their deals without really checking what is going on - they have made it so simple (‘just click this button below to renew and give yourself peace of mind etc etc’) that most people will just do it. Conclusion - blatant rip off and profiteering attempt.

[tforturton]

At one point during November, gas prices were NINE times what they were in the same period twelve months earlier. According to stats on the BBC website, the price per therm in Nov 2020 was 50p. In November 2021, it was 450p. It has dropped slightly to 350p, but it is still SEVEN times higher than a year ago.

So if you have a deal with a gas supplier, that you took out a year ago, you'd still be paying 50p per therm today, whereas the supplier has to pay at least 350p per therm, to buy the gas themselves, in order to provide it to you. This is why so many suppliers have gone bust. You cannot buy something at one price, and then sell it at a staggering loss, without getting into serious problems.
The big companies can ride it out, but not for long.

Anyway, in most cases, the suppliers have fixed contracts with their customers, and therefore they cannot pass on the price rises until those contracts expire. So when your current deal runs out, they will HAVE to increase the price, not only to get at least close to what they are paying for the stuff, but also to recoup some of the losses that have gone before. This goes some way to explain why your bills will double or even triple. What it doesn't explain is why they don't go up six or seven times in cost. Maybe they will.

But...there are rules in the UK that cap power prices (gas, electricity), so that those on lower income can afford to pay their bills. This means the supplier is restricted in the amount they can raise their prices, so there's one little glimmer of hope. And there are also laws that allow the government to charge VAT on power supplies, and also levy a green tax, to pay for the development of alternative power suppliers. These are two variables that could be amended, to reduce customers' bills.

The sudden rose in gas prices was down to a number of things. The sudden increase in usage, by all those people working from home is given as one reason. Large increase in power use in China and India is another. Then there's the forecast of a very cold winter. But the big issue is the current situation in Ukraine, and if war did break out, the price would jump even higher.

Hold on, I hear you say, what about North Sea Gas, I thought we had loads of it? Well, yes we do, but in the last few years it has become difficult for any exploration company to get backing to expand the industry. This is mainly down to green policies, and the pressures of votes. But remember what happened after the Gulf War? When the USA found their oil supplies were in danger, what did they do? - they found their own. Shale Oil production now meets all their needs, and if it's a dirty method, well so what? They are now fuel self-sufficient. Drilling for gas in the North Sea is not the same as digging for shale oil. It's much harder, but it's not as polluting, and I think at some point, the UK government will reverse their laws to allow the subsidies to explorers, to drill for gas, to make us more self-sufficient.

We have little choice. UK power supply is only just meeting demand. We have arrangements with Europe to import power if needed, but they have their own issues, and we'd still have to pay over the odds for it. If electric vehicle use takes off seriously, we will need at least ten new power stations very soon, and what will they run on? No-one seems to to want more nuclear, so we're left with coal or gas. Guess which one gets the vote... Start drilling, folks, we need gas.

[JamesWales]

The boss of Ovo energy was on tv the other day saying that he expects prices to rise throughout the year, and that consumers will be paying almost double what they were a few years ago.

It's in their interest to do this though. Talk up that the product they sell may have to double in price. Benefits them.

There is of course truth in rising prices, but as stated the wholesale price has seen huge falls in the last couple of months.

I saw someone being interviewed by the BBC the other day (maybe he was the OVO guy?) and not once did the journalist raise the fact of falling wholesale prices. With journalism like that, you really have to wonder what the point is. You may as well get a robot to read out some questions

[A Quiet Monkfish]

I have yet to see a reasonable explanation for the huge rise in gas price. If the normal rule of supply and demand is applied, can anyone honestly say that there has been a huge increase in demand for gas? I don't see any evidence of a big increase in industrial output or demand for heating compared to 2 years ago before the pandemic hit.

I think the UK has been hit on 3 counts - Russia hasn't increased supply, the UK has no storage facilities, unlike most of Europe, and a lot of liquid gas destined for the UK has been diverted to Asia where it commands a higher price. In terms of global demand, as the world comes out of earlier, stringent lockdowns, demand has increased.

[goats]

My last company was one of them to go bust (Green) I was paying £112 a month but now I've been switched by the Gov to Shell Energy and already I'm up to £183.00 a month going forward.

How the hell do you know what energy costs? So many variables.

Can’t you switch or do you have to take shell energy? That seems a bit odd…..

[Random in Duquesa]

Can’t you switch or do you have to take shell energy? That seems a bit odd…..

You can switch as soon as your account is properly open with the designated company set by Offgem .
In general the big companies didn't want millions of customers thrust on them at a time when they are struggling to keep pace with the market .
They were already low on staff who are leaving due to getting endless abuse - as if they set the prices- and are finding difficult to recruit so customer service is worse and customers get angrier ..... perfect !
Offgem sets the price cap and the companies tend to halt fixed rates until they know the outcome. Sometimes they offer fixed rates more than the current variable as they feel or know the variable is likely to rise , so it may not look a good deal but could be in future.

The small companies had no chance as they had offered very low rates and were losing money as wholesale prices went up .

Glad I'm out of it !

[goats]

You can switch as soon as your account is properly open with the designated company set by Offgem .
In general the big companies didn't want millions of customers thrust on them at a time when they are struggling to keep pace with the market .
They were already low on staff who are leaving due to getting endless abuse - as if they set the prices- and are finding difficult to recruit so customer service is worse and customers get angrier ..... perfect !
Offgem sets the price cap and the companies tend to halt fixed rates until they know the outcome. Sometimes they offer fixed rates more than the current variable as they feel or know the variable is likely to rise , so it may not look a good deal but could be in future.

The small companies had no chance as they had offered very low rates and were losing money as wholesale prices went up .

Glad I'm out of it !

British Gas have set up a new service called evolve which is just online, you can’t ever speak to anyone I guess this is how they are coping with demand. Got a decent deal when I switched to them though, just before peoples energy who I was with went under, got free boiler cover and drains etc…which is great as it’s a student let. Still about 130 a month…..