High demand for liquefied natural gas from Asia has pushed up prices, along with a cold winter leaving gas reserves lower than usual, and less supply coming from other countries.
Gas is used to generate some of our electricity and electricity prices are rising too. Less wind means that less renewable electricity is being generated. There have been outages at some nuclear power stations too. This is because the energy price cap increased and many suppliers raised the prices of these tariffs to the maximum permitted. If your price increased, your energy supplier should have told you.
Price-capped tariffs are now the cheapest deals sold by some suppliers. However, the prices of these are likely to increase again in six months when Ofgem reviews the price cap. A fixed deal will give you price security — the rates you pay per unit of gas and electricity are set for the length of your contract which is often for 12 or 24 months. The supplier you are moved to will honour any credit balance that you built up with your old, failed provider.
Once you have been switched to the Ofgem-appointed supplier, and any balance transferred over, you can leave at any stage without paying exit fees, although at the moment you are unlikely to be find a much better deal.
Switches typically take days. As happened to the financial markets in , the energy market has all but seized up.
Last week E. As many businesses were forced to work more remotely, office blocks and retail outlets were closed down, which has a big impact on the cost of running those businesses. Of course, as the prospect of returning to some kind of normalcy gets closer, many business owners are already looking ahead at ways to keep their energy costs as low as possible.
Energy prices are likely to go up as demand returns to something resembling the previous status quo. Traditionally, that would mean it would only be natural to fix your energy prices for the next few years. However, the unique circumstances of a post-pandemic economy means more variables to consider. It is an act passed by parliament that means energy suppliers have a limit on the maximum amount to charge customers. This applies to all standard and default variable energy tariffs. At the time of writing, it seems increasingly likely that the energy cap will remain in effect until , although it has only been approved for an extension until December 31st, If your business is on a default variable or a standard variable tariff, then you will be affected by this energy cap.
Those with a fixed-rate tariff will be unaffected by any changes if the price cap is extended or reduced. Switching your energy suppliers is always one of the easiest ways to reduce how much you pay for your energy.
One of the benefits of the energy cap bill is that supplies cannot charge you an exit fee if your business tariff is one of those affected by the energy cap. When you can save hundreds of pounds simply by switching to a new supplier and a new tariff, it makes sense that avoiding those fluctuating energy prices and benefiting from more long-term savings is only good news for your bottom line. If you currently have a fixed price energy tariff , you have agreed to pay a set price for a single energy unit.
That price will be locked in for the duration of your contract. The more units of energy you use, the higher your bills will be. For many businesses, the duration of that contract will usually be between one and three years, although more suppliers are offering more long-term contracts for businesses that want to benefit from some additional services and offers. ES Best. ES Mag. Follow us:. Password Please enter a valid password. Submit Submit. By Ellie Swain.
O pting for a fixed-price tariff allows you to lock in the cost of the energy you use in your home for a set time. Find out more. As a general rule though, you will pay less by opting to fix the cost of your energy. What happens when your fixed-price energy tariff ends? When should you switch to a fixed rate energy tariff? How do you switch to a fixed rate energy tariff? Can I switch tariffs if I have a prepayment meter?
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