As of October 2019, most suppliers have implemented energy price drops, with average decreases of around £75 per year. Find out what this means for you here.
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See which energy suppliers have made gas and electricity price rises or price cuts, how much prices went up or down by, and when price changes will come into effect.
And don't forget, whether gas and electricity prices are rising or falling, it's always a good idea to compare energy prices in your area. When you switch your energy supplier with uSwitch you could save hundreds.
Our comparison rates are always kept up to date, so you can be sure that you're getting accurate results when you do a comparison.
2020 gas and electricity price changes
There have been no widespread price changes so far in 2020. However, the so-called 'big six' energy suppliers decreased prices for their standard variable and prepayment customers in October 2019:
Following an increase in prices for millions of customers in April 2019, the major energy suppliers have now all lowered the cost of their standard tariffs in the region of 6%, with average bill drops of around £75. This is in reaction to a reduction in the energy price cap, set by industry regulator Ofgem.
It's estimated that around 15 million UK households will be affected by this latest round of energy price changes.
What can I do if my energy supplier raises prices?
Whether or not your energy supplier has recently put up prices, it's always a good idea to run an energy comparison to see if you're still on the best deal.
I've never switched energy before - how does it work?
It's easier than you think to switch energy supplier, we promise.
Here's what you need to hand:
- Your postcode
- A recent energy bill
- Your bank information (to set up your direct debit)
That's it! uSwitch does all the rest, including comparing top deals in your area, and providing savings figures, customer ratings, and the ability to filter by preferences including green plans and more.
If you want a little more assistance, call one of our energy switching experts on 0800 6888 244.
For step-by-step instructions on how to switch energy suppliers after a price rise, read our dedicated guide about how to switch your supplier for gas and electricity here.
What causes energy prices to rise?
There are several theories on what factors impact suppliers' gas and electricity prices, and all of them have some element of truth but they’re not the underlying causes.
Market forces can cause the wholesale price of gas to go up, which then means energy customers are charged a higher bill, but this isn't the whole story.
So what is the cause of gas and electricity price rises?
The energy price cap
The most recent wave of price changes have been in reaction to changes in Ofgem’s energy price cap. But how can a cap change the prices suppliers are allowed to charge?
The cap was first introduced in January 2019 and limits the amount that suppliers can charge for standard gas and electricity tariffs. Many suppliers, including the big six energy providers, set their rates right up to the maximum allowed by the cap.
Just a month after its implementation, Ofgem announced it would increase the rate of the cap to £1,254 per year. Many suppliers reacted by announcing price rises to come into effect when the price cap changed in April 2019.
The cap was then reviewed again in August 2019, and lowered to £1,179 for standard variable tariff customers. This price change came into effect on 1 October 2019.
Limited supply
Gas is pumped out of the ground and electricity is mostly generated using a mix of fossil fuels like oil, gas and coal. These are all natural supplies, which are costly to get hold of, and more importantly, in limited supply.
Despite there being a limited supply of fossil fuels, the technology to find and extract them has advanced significantly and has meant that there is no shortage of gas and electricity.
The limited supply of fossil fuels could impact prices if the gas and electricity companies were looking very far ahead into the future, but in the short-to-medium term, supply should not be a factor.
Global conflicts
Wars in oil-rich countries and conflicts between countries over gas pipelines can impact wholesale prices. For example, wholesale gas prices in the UK have spiked when supplies in Ukraine, Iraq and Syria have been threatened in recent years.
For the most part, these spikes have been temporary, and the supply of gas and electricity has remained constant in the UK throughout these conflicts, so it isn’t the ultimate factor.
UK energy providers
There are some arguments that energy providers could afford to keep prices low but instead choose to maximise profits by raising prices. However, the industry regulator Ofgem aims to provide transparency in the way the sector prices its gas and electricity. Ofgem also aims to keep the market competitive to ensure that consumers get the fairest price possible.
You can go to the Ofgem website to see how much profit suppliers made each year.
To some degree all of the above arguments could have some impact on your energy prices, but consumers are able to take back control by switching. By comparing energy prices you can switch to a cheaper provider and ensure that energy gas and electricity suppliers have to stay competitive to retain their customers.
What makes energy cheaper?
Quite simply: competition. Energy suppliers need your custom to be profitable. If their customers leave because there's a cheaper energy provider or one with better service, then they lose out.
Comparing energy prices and switching your energy provider is one of the easiest ways of getting cheaper gas and electricity bills. Suppliers are always trying to win customers from their competitors by offering cheap deals.
However, gas and electricity prices do have a tendency to rise, so it's important to keep comparing the market.
Will gas and electricity prices rise in 2020?
Suppliers across the board raised their prices in April 2019 in reaction to Ofgem's price cap rise.
This price rise, though, was followed by a smaller price drop which came into effect in October.
The energy price cap is set to be reviewed again in February 2020, and if it’s increased again we will probably see suppliers raising their prices from April that year.
It’s also possible that any increases to suppliers’ costs could be passed down to customers in their energy bills, as long as the rates don't exceed the price cap.
Energy suppliers are always looking to make a profit but many will want to avoid the bad publicity of raising their prices first. However, what happens is that when one supplier announces a price rise, others are likely to follow shortly after.
It's a good idea to compare prices from energy providers and see if you can switch to a cheaper energy deal before any price rises happen.
Are gas and electricity prices regulated?
In the UK, gas and electricity prices are not regulated, and are set by the suppliers directly.
The industry as a whole is regulated by Ofgem, which seeks to give consumers a better understanding of the suppliers' costs and make sure there are competitive pricing options for all kinds of customers.
Essentially, the way the UK's energy market works is that suppliers compete on price and service to win customers. Energy providers will set their prices based on its ability to cover their own costs and to make a profit. However, energy suppliers cannot set prices that exceed Ofgem's energy price cap, which was first introduced in January 2019 and is reviewed twice a year.