Energy bills to drop from July, experts say
Energy bills are expected to drop significantly from the start of July, according to new analysis released on Tuesday.
Energy industry consultancy Cornwall Insight said it thinks the price cap on energy bills will fall by more than £1,200 for the average household when it is next updated.
However, because the Government bill support, which has artificially lowered bills, will fall away, households will only be around £437 better off per year on average.
The analysts at Cornwall said they expect the price of electricity will drop to 29.55p per unit from the start of July from 33.2p today with Government support.
Gas prices will fall from 10.3p today – including Government support – to 7.55p from the start of July.
It will mean that the average household pays around £2,063 per year for their gas and electricity, though this will vary based on how much energy they use.
The price cap will be changed again in October to bring the average bill to around £2,098, before hitting approximately £2,163 next January. The current Government support means that average bills are around £2,500.
Deals
Dr Craig Lowrey, a principal consultant at Cornwall Insight, said energy suppliers might start offering more deals that lock customers into a fixed price for a year or more.
These deals could give customers certainty over the price of their energy bills, and protect them if energy bills start to rise. However it is a gamble for households because, if they lock in a price and energy costs fall further, they could be left out of pocket.
“As the wholesale energy market has levelled out in recent weeks, our predictions for the price cap have followed suit,” Dr Lowrey said.
“Some energy suppliers will potentially look to leverage this opportunity to bring back fixed tariffs on or around the price cap, with stable projections lowering concerns they will lose out over the fixed term.
“This potential re-emergence of competitive tariff propositions presents an opportunity for households to finally get a grip on their energy bills, having been hit hard by the energy crisis.
“While this seems positive, fixing energy tariffs is a gamble – the market may go down as well as up, and households run the risk of getting locked into bills higher than the price cap.
“We are faced with several uncertainties as we look beyond the July price cap, with ongoing consultations on the cap modelling and other legislative changes that could potentially bring significant changes.
“This leaves our predictions for the end of this year and beyond potentially vulnerable to change.”
“What we do know is, while energy bills may begin to stabilise, they are still far from returning to pre-2020 levels.
“While consumers may feel more secure, we must not under-estimate the fact that these bills remain unaffordable for many households.”
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Don’t get too excited. The demented P.R machine may be predicting good(ish) news from July but the schemers are already at it getting set to jack up the prices back up again come winter. Apparently “Putin is cranking up his energy price war machine for a hard winter campaign” or words to that effect. Believe me nothing much will change until governments act to suppress the greed of the big oil and gas companies and the electricity corporates that piggy back on their avarice.
Ultimately, the fall in wholesale price should be passed down to the consumer – but will it? We had the same situation at the petrol pumps and until there was some applied pressure the cost went down little, if at all, after wholesale costs had come down, the supermarkets took their time. The sad thing is if left unchecked companies will keep the price high to maximise profits at our expence. In other words don’t be surprised if we still have high inflation at the end of the year because of persistent profiteering.