The surge in global energy prices also spilled into wholesale gas and electricity prices in the UK. Forward wholesale gas prices increased by another 5.3% today (Friday 6th June) taking the increase since the beginning of the year to 76%.
According to our calculations wholesale gas prices are now higher than retail gas prices even before allowing for the substantial costs of transportation, metering and billing. To restore the balance between wholesale and retail prices, retail gas bills will need to rise by over 40% and retail electricity bills by over 20% in the next 12 months.
What we think:
Fix your energy bills NOW…
The last time wholesale gas prices broke above retail gas prices was 3 years ago, in June 2005. In the following 18 months energy bills rose by a record 47%. A very similar thing is going to happen this time around, except that the money value of the increase is going to be even higher.”
According to analysis from TheEnergyShop.com, the latest surge in wholesale prices means we can now expect a 43% increase in gas bills and a 21% increase in electricity bills over the next 12 months. This will add another £360 to the average dual fuel bill taking it to £1,410.
We don’t know whether energy bills will be £1300, £1500 or £1700 in a years time. We are however pretty sure that they are going to be a whole lot higher than the £1050 or so at which you can currently fix your energy prices. Do not spend too much time thinking about this. To protect your finances you have to fix your energy prices now.”
Of the Fixed Price products in the market, TheEnergyShop.com is suggesting customers go for the longest possible fix that they can.
All fixed and capped tariffs are currently available at www.TheEnergyShop.com.
Best Capped/Fixed Energy Deals (6 June 2008) Payment by Monthly Direct Debit
The British Gas Price Guarantee 31 Dec 2009 carries a potential cancellation charge for early termination of the contract. The cancellation charges are £20 for electricity and £75 for dual fuel. The E.ON Energy Saver 2 tariff comes with a free energy monitor and carries an early exit penalty of £35. The ScottishPower Fixed Price Energy 2009 tariff is fixed until 31 August 2009 and carries an early exit penalty of £30 for electricity and £50 for dual fuel.