The energy market has been shaken up dramatically following the announcement of recent price hikes.
British Gas recently announced they were increasing gas prices by almost as much as 18%, and electricity prices by 16%.
Consumers frustrated with price hikes will not be pleased to hear todayís announcement that the energy suppliers owner Centrica have announced profits of £1.3 billion in the last six months.
Centrica however experienced a 19% fall on the same period last year and British Gas claim to have been making a loss on the price of gas since April.
Blaming the market for the increased price of wholesale gas, British Gas announced their first wave of price hikes earlier this month.
The average householdís dual gas and electricity bill could now increase by £200 annually. This will come into affect as of 18th August 2011.
The first supplier of the ëbig sixí to announce their price hikes was Scottish Power. They announced their second price hike in just 9 months in June pushing up prices by 19% on average for gas and 10% for electricity. This will come into affect from Monday (1st August).
They are increasing the cost of standard gas by a staggering 19% and electricity by a further 10%. This could add £175 to annual dual fuel bills.
The nation could be on the verge of a crisis as more and more energy suppliers look set to follow suit.
More recently, Scottish and Southern Electric (SSE) released details of their own increases earlier this month, raising gas by 18% and electricy by 11%. This will come into affect as of 14th September.
This is expected to affect as many as 5.2 million electricity customers in the UK and 3.6 million gas customers, adding an extra £171 to the average annual dual fuel bill.
This will have a particularly detrimental effect on those with low incomes, leaving many in the cold as the threat of fuel poverty looms over many.
The number of people falling into fuel poverty is increasing as people canít afford to pay for the costly price of warmth during the winter months.
Many customers are being advised to compare energy suppliers and find the best tariffs.
How to reduce you energy bills
1. Switch Suppliers
It could be worth switching to a fixed price plan in order to save on household bills. If you have never switched energy suppliers now is the time to do so. The energy market is changing rapidly and regular price hikes could be a common occurrence.
2 Consider Your Options
Donít be fooled by initial big savings by energy suppliers. Online tariffs tend to be cheaper than standard tariffs, however prices are likely to increase. What seems like a good deal now might not be beneficial in the long term.
Attractive high annual savings may only last until the energy suppliers wish to push up prices. If you are not going to opt for a fixed plan, wait until more energy suppliers announce price increases before switching.
3. Go Fixed Term
Many energy suppliers are now offering long term fixed prices plans to safeguard against further price hikes.
Consumers are being advised to either switch to a long term fixed tariff or wait until more energy suppliers announce price hikes.
‘The best tariffs, particularly low-cost fixed rates, are filling up fast and once they are oversubscribed, providers pull them,’ said Mark Todd from energyhelpline.com.
E.ON recently launched one of the longest 2 year fixed price plans, which suggests that they are likely to raise prices during the next two years.
The longest fixed tariff on the market is available through Scottish Power. There fixed Price NSC Online tariff keeps you locked in until 31st December 2014 with an average annual bill of £1214.
4. Search Your Local Area
Prices different all over the country and your cheapest supplier will depend on where you live. In order to find the best deal in your area you will need to compare energy suppliers.
5. Go Online
Not everyone is happy about the idea of going online and managing their account online however itís there you can find some of the cheaper tariffs.
Most online tariffs are not fixed price and if you feel that a fixed price plan will not save you that much, going online could work out to be more cost effective.
EDF offer the cheapest internet deal at the moment with its Online [email protected] 10 costing an average £940.49 per year. Payments must be made monthly via direct debit.
With three of the leading six energy suppliers having already announced price hikes, itís only a matter of time before the rest of them do. Now is the best time to compare energy suppliers to ensure that you get the best deal and reduce your household bills. By switching to a fixed price plan you could avoid the price hike domino effect.