The biggest story of last week, probably more significant than E.ON’s price increase, is the massive increase in British Gas’ Click Energy 4 prices that came out on Friday 8th Feb 2007. More on that below.
After a sharp run in the first 2 weeks of 2008, wholesale gas and electricity prices appear to have stabilised at these higher levels, at least for the time being. The wave of retail energy price increases that we’ve seen over the past 5 weeks has more or less restored the balance between wholesale price levels and retail price levels; a process that will be complete when Scottish and Southern Energy finally increases its prices from end March 2008 onwards.
Recent Retail Price Changes
The increase for E.ON is higher than the headline numbers quoted by the company because it takes into consideration the loss of discount for late pay cash/cheque customers.
Standard Energy Bills top £1,000
The average energy bill of a customer with British Gas, EDF Energy or npower is now in excess of £1,000 (£1,004). More than half the UK population has already been affected by these increases.
The table above compares Standard dual fuel energy bills for the Big 6 following the recent increases. The bills are an average of cash/cheque and monthly direct debit payment methods based on the average user profile.
British Gas’s Click Energy tariff
In what was a surprising move, British Gas hiked the price of it’s Click Energy 4 tariff by £137 (18.5%) and launched its latest online offering, Click Energy 5 at an equivalent price level.
What we think:
This is a worrying move for consumers. Last year British Gas was prepared offer Click Energy at deeply discounted rates in order to win back customers. What resulted was a price war with British Gas leading the way and consumers winning out. According to figures from TheEnergyShop.com, Click Energy 5 will now rank 5th for online deals after E.ON, Atlantic Electric and Gas, Scottish and Southern Energy and EDF Energy.
This move indicates that British Gas is no longer prepared to incur negative margins to win over customers. If other supplier’s follow, then consumers could be in for a further round of bad news on their energy bills. British Gas is due to announce its results for 2007 on 21st February. These should provide a strong indication of current pressures in the energy markets.
Best (available) Online Energy Deals (as at 11 Feb 2008) Payment by Monthly Direct Debit