Do energy prices vary

Question

Energy4 · Accepted Answer

Do energy prices vary YES, The wholesale price of gas and electricity is not easily predictable and continually fluctuates influenced by world events and the supply and demand of the world’s producers and consumers

Fluctuating wholesale prices mean that the price of gas and electricity offered to UK commercial customers by the 15 or so supply companies is never the same

By constantly monitoring the changes in the energy market, we can help the customer identify the most competitive gas and electricity prices for an individual business or site

Do energy prices vary, and does the price cap affect me?
The energy price cap is backstop protection from the government, calculated by Ofgem.

It applies if you’re on a default energy tariff, whether you pay by direct debit, standard credit or a prepayment meter.

It won’t apply if you:

Are on a fixed-term energy tariff
Have chosen a standard variable green energy tariff Ofgem has exempted from the cap.
You can call your supplier to check if you are on their default tariff. If you’re not on one, you’re probably already paying a better rate for your energy. But it's still worth checking if you could save more by switching.

The price cap limits the rates a supplier can charge for their default tariffs. These include the standing charge and price for each kWh of electricity and gas (the units your bill is calculated from).

Ofgem sets the cap level for summer and winter based on the underlying costs to supply energy. This keeps prices fair and makes sure suppliers reflect any drops in costs in your rates.

Will my bills fall or rise under the price cap?

The price cap won’t limit your total bill if you are on a default tariff.

The cap level we set depends on costs in the energy market. So your bills could go down or up.

Different factors also affect how much suppliers change their prices (the rate they charge you) to meet the cap:

Where you live
How you pay (prepayment, direct debit or standard credit)
Your type of energy meter.
Your energy usage will affect your total bill too.

It’s best to contact your supplier for personalised information on your tariff.

Any figures you may see in the media aren’t guaranteed. They also usually show a customer with ‘typical’ energy usage who pays by direct debit. So what you pay could be more or less than what’s reported.

What next?

Your supplier must automatically apply the price cap Ofgem sets if you are on a default tariff. That’s right so you get a fair price, but it won’t mean you’re on the cheapest deal. Shop around to see if you can get a better tariff.