2019 - A record year for price hikes?
Although we’re only six months into 2019, this year has already seen a total of 42 energy rate rises, compared to 57 during the whole of 2018.
There only needs to be another 16 price rises over the next six months to make 2019 officially the worst year on record for energy hikes. And with another price cap announcement in August - the adjustment will be implemented in October - there’s every chance that 2018’s figure will be heavily beaten.
Why are energy prices rising?
Historically, energy companies have blamed their rate rises on all manner of reasons, including:
- An increase in wholesale prices
- An increase in demand
- Higher transportation and infrastructure costs.
But the sudden spike in price hikes over the last 12 months suggests the energy price cap is now the primary factor, especially when you consider how few and far between increases were before it was implemented.
Although it feels like energy companies have been picking customers’ pockets by putting up prices year-after-year, there were actually just 15 price rises across the whole of 2017.
This was the year the price cap was first mooted by the government, and long before it finally came into effect.
In fact, there had only been a further 15 price rises in the first six months of 2018 but, following the government’s passing of the Domestic Gas and Electricity (Tariff Cap) Act 2018 as law on July 19 – the act which gave Ofgem the duty and the powers to put the energy price cap in place – a further 42 price hikes were announced over the remaining six months.
To put that in perspective, there has been a 180% increase in the number of price rises announced in the first six months of this year, compared with the whole of 2017.
And while Ofgem’s next announcement could see a drop in the level of the price cap, millions of customers who are stuck on standard variable rate tariffs will still be overpaying for energy.
How to beat the energy price hikes
The only way to beat the price cap is to switch energy supplier – if possible, it may be worth doing this before Ofgem’s next price cap announcement in August, as suppliers may put their prices up again.
Switching to a fixed rate deal will see you can lock your rates in for 12 months or more, meaning you’re protected from any price increases for the duration of your deal. Remember though, it’s only the unit rate that you fix, meaning your bills can still fluctuate depending on how much energy you use – that’s why it makes sense to also improve your home’s energy efficiency and make some changes to how and when you use gas and electricity.
To run an energy price comparison and see how much you could save, enter your postcode at the top of the page or at https://www.ukpower.co.uk/home_energy
How to switch energy provider
Switching energy provider is a quick and easy way to save money on your monthly gas and electricity bills.
Click here to run an energy price comparison, and see if you could be paying less for your gas and electricity.