Until now it has been the big six energy companies that have benefited from the slump in fuel prices. They have been able to buy at a good rate ever since June, when the Brent crude oil price index, indicated the start of the decline. This has not been passed on to the consumer in reduced tariffs. However, now the Government is investigating into why consumers are being overcharged by energy companies.
The big six have followed the lead of the smaller independent suppliers, in dropping their prices. From now on it should be the consumers who benefits.
Charges for people on standard tariffs should start to fall, following the drop in the price of wholesale energy to a 2 year low. Prices should change on tariffs now being offered to anyone who is wishing to switch suppliers. George Osborne, the Chancellor, has made it quite clear that households should be paying out far less for power, in the coming twelve months.
Although gas prices are about 27pc lower than a year ago, while electricity prices also reflect a drop. It is partly due to the effect of the tariffs from independent suppliers affecting the figures. The annual gas and Electric dual bill stays much the same as last year at about £1,265
Will prices fall soon, and by how much?
The kind of savings seen in the wholesale markets will not compare to domestic bills, due to the inclusion of such items as Green taxes and VAT at 5pc. It will also depend on exactly when the Energy supplier purchased on the world market. As the rate is constantly changing, so will the calculations about costs. As these companies do not tend to disclose exactly when they buy, it would be hard to estimate accurate figures. Previous slumps in oil costs did not benefit consumers a great deal; the last plummet in July 2014 only saw an average £3 knocked off the bill each month. If the price fall is sustained over a longer period, we may see larger reductions.
Will an investigation Work?
Energy suppliers did reduce their tariffs last year, when the chief secretary of the treasury intervened. Sometimes the threat is enough and with general elections thrown into the equation, price cuts would look good on the credit side of any manifesto. In the end they are all fighting for the same customers, so none of them can afford to ignore the competition.
Why people do not switch energy tariffs
Energy firms rely on the bulk of their customers never switching, but continuing to buy at a higher rate. If someone is automatically switched to a higher tariff and does nothing about it, they could find themselves paying considerably more.
Generally people either do not know how to switch efficiently, are too set in their ways to bother, or think it will cost them more. Many are still completely unaware that you can actually change your supplier, believing that where you live, will be who you get.
To help you switch energy supplier easily and efficiently,Energy Switcheroo is here to help, particularly if you are new to the idea of switching energy suppliers.