Japanese Tsunami means big bills this winter
Filed under: Utilities
The analysis are predicting that the wholesale gas price could climb as much as 28%.
The problemThe issue has emerged because after the earthquake, Japan shut down its nuclear power reactors. This means that much of the world's liquified natural gas supply is being bought to make up the shortfall. It means less is coming to the UK, where imports have fallen 30%. The price of gas in the UK, as a result, has climbed.
Niall Trimble, of consultants Energy Contract, told the Daily Express: "One of the reasons prices were high last summer and have stayed high is that the LNG we were expecting hasn't turned up." Sabine Schels, a commodities strategist at Bank of America Merrill Lynch, told the Daily Mail that UK winter gas prices (now 70.5p a therm) would rise to 90p a therm.
Many utility companies buy their fuel on the wholesale markets many months in advance, so in some instances customers have been shielded from this increase. However, by the winter the effect is expected to filter though.
So what can you do?The experts are already recommending switching to a competitive product, and considering a fix. USwitch pouts out that while standard prices remain steady at £1,252 a year, online prices have started to creep upwards, hitting £1,091 a year today.
The latest move comes with ScottishPower pulling its Online Fixed Price Energy July 2013, a fixed price online plan costing £1,055 a year, and replacing it with Online Fixed Price Energy August 2013, which will cost £1,086 a year on average - an increase of £31 a year.
Emma Bush, energy expert at uSwitch.com, says: "This move follows Ovo Energy's recent price hike so will no doubt leave consumers feeling a bit jittery over where household energy prices are heading. The fact is that small suppliers and the competitive online plans offered by the big six are usually where you first see signs of trouble ahead. Online plans are always competitive, but because they are so keenly priced they are also the first to reflect any volatility in the market, which is why we have started to see online prices creeping up." The risk is that the current blip in the wholesale price establishes itself as a long-term trend by the winter, and suppliers begin another round of increases.
USwitch best-buys at the moment include EDF Energy's Blue +Price Promise September 2013, Sainsbury's Energy's Online Price Freeze June 2013, npower's Bill Saver August 2013 and Scottish Power's Online Fixed Price Energy August 2013.
It's also worth getting into healthy energy habits while consumption tends to be lower, so we are prepared for the winter. The Energy Saving Trust has a number of useful tips it also has a month-by-month guide to saving energy, so you can make seasons savings as well as preparing for the winter.