Joe Malinowski: In a volatile market, fix your energy deal without delay

Share
Related Topics

British Gas has sent out a clear warning that energy prices are likely to rise again later this year, unless wholesale energy prices start to fall back again and quickly.

The wholesale markets are where energy suppliers buy the gas and electricity that they then resell on to us.

Wholesale gas prices have risen particularly strongly, driven by the higher price of oil and by concerns over supply disruptions as a result of violence in Libya and the earthquake and tsunami in Japan. The latter has led to a diversion of LNG (liquefied natural gas) cargoes to Japan in response to a shutdown of nuclear generation capacity. Wholesale gas prices have risen by 78 per cent since their bombed-out levels of early 2010.

On a positive note, it is worth highlighting that we are not going to see a rerun of 2008 where some energy suppliers hiked gas prices by 50 per cent. That is because wholesale energy prices are still nowhere near their peak levels of 2008 yet retail energy prices are 20 per cent higher than were in April 2008 (the last time wholesale prices were at similar levels to today).

Wholesale markets are very volatile, which means that prices can move up or down very quickly. In fact, oil prices have fallen by 10 per cent just in the last week. Further prices hikes are not yet a certainty as wholesale prices could yet fall from current levels.

That is the good news. The bad news is that if wholesale prices don't fall from here, then we will see further energy bill hikes, and those hikes will likely take prices to new record levels.

In this environment, the best thing to do is to fix the rates that you pay for your energy, so protecting you from the potential increase for a period of a year or so. There are still several fixed rate energy deals available which are cheaper than standard bills, and which will look like great value when energy bills start rising again.

The important thing is that you don't delay. Once energy bills start pushing up again these rates will have long disappeared and it will be too late.



Joe Malinowski is the founder of the energy price comparison website theenergyshop.com.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Guru Careers: Software Developer

£35 - 40k + Benefits: Guru Careers: We are seeking a Software Developer (JavaS...

SThree: Trainee Recruitment Consultant / Resourcer

£18000 - £23000 per annum + Commission: SThree: As a Trainee Recruitment Consu...

Ashdown Group: UI Developer - (UI, HTML, CSS, JavaScript, AngularJS)

£25000 - £40000 per annum: Ashdown Group: UI Developer - (UI, JavaScript, HTML...

Day In a Page

Read Next
Immigration enforcement officers lead a Romanian national who has been arrested on immigration offences from a house in Southall in London  

Don’t blame migrants – the West helped to create their plight

Yasmin Alibhai Brown
Richard Hammond, Jeremy Clarkson and James May on stage  

A politically correct lefty goes to see Top Gear live – you'll probably believe what happened next

Simon Usborne
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?