Energy companies remove the cheapest offerings from the market almost immediately after they are launched, as consumers flock to them in such numbers that providers are sold out
The Brits will have to act fast to get some of the cheapest energy offers as many are withdrawn from the market within hours of being released.
Energy bills have skyrocketed for a number of reasons, but most notably the rising gas costs .
On April 1st, a price cap which caps energy bills for the average household at £1,277 a year will rise to £1,971 for gas and electricity on collective agreements – an increase from £693.
Before energy bills started to rise last year, the cheapest deals were usually fixed price deals.
The most expensive were variable rate deals, which consumers typically came to because their fixed rate contract had expired and they hadn’t switched.
Energy regulator Ofgem introduced the price cap to curb the runaway prices energy companies were charging for these variable deals, believing consumers were being penalized for their loyalty.
However, with rising energy prices, fixed tariffs generally became more expensive than variable ones – because fixed tariffs are not subject to the price cap.
But now cheaper fixed price offers are returning – often only for a limited time.
Energy company Octopus yesterday released a “limited number” of spaces at a tariff of £1,950 for a home with average energy levels. The sun reports .
But the three-year fixed-price deal sold out within hours.
Another energy supplier, E.on, presented a cheap fixed-price offer only for existing customers.
It too was sold out within a day after MoneySavingExpert was founded Martin Lewis reported it on Twitter .
E.on confirmed to The Mirror that the deal was closed due to unprecedented demand.
Even the cheapest offers are not available to everyone. For example, energy companies might have a limit on how many customers they can accommodate in a certain area.
But currently, according to research by The Mirror, there are some cheap fixed-price deals, for example for a two-person household in London that needs gas and electricity.
The cheapest is £104 a month or £1,250 a year from Sainsbury’s Energy. The deal is fixed for one year and has no early exit fees.
E:on Next has an offer at the same price and with similar conditions.
The second cheapest offer from Outfox The Market is £119 per month or £1,433 per year.
The deal is set to run for a year, but customers would pay £100 if they left before that deadline.
Consumers fearful of rising energy prices should keep an eye on the market and be ready to make the switch.
However, for most Brits, sticking with an offer capped by the Ofgem price cap is almost certainly the cheapest option.
Fixed price offers can come with expensive early exit fees.
And some fixed-rate contracts can last up to three years. So if you sign a contract, you have to bet that energy prices will not fall too much during this period.
If that’s the case, you could be stuck paying well over the usual rate.
Why are energy costs rising?
They are increasing for several reasons.
Much of the increase reflects the rising cost of gas, not electricity.
The reasons for this increase are supply and demand, as there was a very cold winter in Europe last year.
British households rely heavily on gas, making the problem worse.
Most households (86.3%) have gas central heating, the Office for National Statistics said.
Ofgem is expected to adjust its price cap again in October 2022, where prices are expected to rise again – triggered by rising wholesale gas prices and now the Russia-Ukraine conflict .
https://www.mirror.co.uk/money/cheapest-energy-deals-being-pulled-26388423 Some of the cheapest energy deals close just hours after launch