Unless you’ve been living under a rock you’re sure to have heard the news that British Gas has hiked its prices by a whopping 15%. So should we all be running away from British Gas? Paul Schofield, Head of Utilities, suggests not – because the company still offers the UK’s cheapest deal…

Click here to read this article.

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Community

Paul, there are a few issues here: 1. No one has a clue what their meter tells them. Comparisons are very difficult and completely untransparent in the domestic market. 2. The idea that there are lower prices because of competition is laughable. Anyone who thinks having a number of suppliers leads to lower energy prices should get out more: just a short drive and see 1.039 pence per litre at Shell, Esso, Total , Tesco etc should disabuse them of that idea! 3. Those who say that prices fell after competition in 1994/96 should remember how low oil was then. Prices fell because of low oil prices, not UK competition! 4. What is the is UK fixation with fixed energy prices? It's an economic given that spot prices are generally lower than forward prices, look at pork bellies, tin, lead, gold, silver, etc etc. North American domestic consumers get a different price each month, they handle it. UK consumer are told that gas or electric futures are going up, yet the main reason why they are going up....is because you can't access monthly wholesale prices. Get a fixed price today and you pay a huge fear premium, yet suppliers only buy on actual supply and demand on the day of use: some days it's higher, most days it far, far lower. 5. One reason why North American (or French, Italian, Japanese, Australian) domestic customers get a different price each month is that their meter actually gets read each month. Isn't it nuts that a two ton piece of metal that is constantly moving at high speed can be found (via GPS), or a 10 gram amalgam of metal and plastic ( a mobile) can also be accurately read and tracked, yet a 10 Kilo hunk of metal under the stairs (your gas or electric meter) can only give readings every year or so! 6. Keeping the fiction that competition lowers prices keep Ofgem in a job, but is also extremely profitable to commercial energy consultants ( for Industrials) or sites like uswitch or money supermarket who get up to 7% commission from suppliers. Why are there no uswitch sites in the USA, Australia, Canada? (or France, Germany etc?) Because consumers in those countries, who often have more potential suppliers than in the UK, pay gas or electric bills monthly based on actual use compared to transparent price references! So, whether you are with Esso Gas, or Total Electricity or Tesco Utiility is just as meaningless as where you put petrol in! What's money supermarket's commission?

Great post Jackg.

Paul,

I just don't get it.You say BG is the cheapest now but when I run your own search engine against my consumption details and my own calculations, BG comes out far higher than my existing supplier. (in excess of £100). I have queried this before and was told it was probably an historic tariff.It isn't as far as I can see because Atlantic are still offerring it.

Can you help me out here please?

Sound advice on switching, but the time is takes via Money Supermarket is disappointing: Far quicker to contact the company concerned direct. I've waited almost a month without reply for my switch, despite phoning Money Supermarket to ask why the delay. Still no action !

1. Atlantic is actually a trading name of Scottish and Southern, but you'd have to be a detective or an industry professional to know that. There are only 6 domestic suppliers: EDF, S+S, Powergen, Eon, British Gas or Scottish Power (whose Spanish parent Iberdrola is allegedly to be bought by EDF any moment. down to 5) Any of the other names you see out there buy their gas or electricity from these guys. Any savings they offer won't last, no one, but no one ever beats commodity markets in the long term. 2. But each of them has at least ten tariffs. Ofgem morons say that's choice, I say it's confusion. A variety of tariffs yes, a deliberate attempt to confuse should be referred to the OFT. If there were ten different tariffs from your mortgage, insurance, credit cards people would be outraged. But since no one, especially Ofgem, understands energy, these guys get a free ride 3. Amazingly, or not, Energywatch (which is being disbanded while Ofgem continues!), quoted a Cambridge University study of people who used switching sites. Because nothing is simple on these sites, i.e. a simple quote in price per kWh, varying bands etc, they found out that 30% of people who used tariff comparison services actually ended up paying more !

Thanks Jackg.I was aware of the Atlantic relationships and the others you mentioned.I am with you entirely on this false competitive market and have gone on record many times here.I also share your view on the Ofgem organisation.It really is time the OFT became involved because the rest of them whine a bit but do sod all about it.

There may be a discrepancies in best buy caused by banding,off peak etc.but this should be marginal.I not only use this comparison website but model the prices and bands myself to check the guidance.That's where my confusion lies with the MS claim that BG are currently the cheapest supplier.It doesn't add up based on MS own calculations and my own.

I have the print out in front of me from their search engine which shows BG Click Energy 4 as £118.91 dearer than my current deal.They also lie well below various offerrings from Eon and Scottish Power.

Still no reply !! If I was the expert,I wouldn't want this apparent inconsistency to be left hanging.

backfoot,

British Gas Click Energy 4, as we state clearly in all our figures, is the cheapest product based on average consumption (Gas 20,500kwh and Electric 3,300kwh).

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Regards,



Scott Byrom

Utilities Manager

moneysupermarket.com

jackg,

I'd like to ask you where you got the 7% commission figure from!?

We do receive a commission from the provider for applications but it is not taken from the consumer in any way, shape or form.

The price you see on MS.com is the price you would get direct from the provider.

I hope this helps.

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Regards,



Scott Byrom

Utilities Manager

moneysupermarket.com

Scott,

Aaah so its not the cheapest for different profiles of usage? In my case dramatically different and more expensive.Shouldn't the article have made this clearer?

Otherwise it looks like you are favouring BG with praise which is not entirely justified either now and certainly not in the past.Also as someone else pointed out,how long will it be before BG do a catch up and increase the rate on this tariff ? Is there a guarantee that they wont hike that one after everyone has followed your guidance?

backfoot,

No it's not going to be the best product for everyone and that's why we ask consumers to carry out a comparison to see if it's the best deal for them.

Relevant piece from the article:

The product is the cheapest on average throughout the UK - so my advice is that you should check out our gas and electricity comparison tool now and find out if it's the cheapest for you. If it is, then don't hesitate - move now!

I hope this helps.

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Regards,



Scott Byrom

Utilities Manager

moneysupermarket.com

caretaker,

You should have received a letter from your supplier if your application has been successful.

If you contact our call centre team on 0845 345 1296 they should be able to say whether or not we have received any confirmation from the provider.

As the application is automatically sent to through provider you apply to, there should be no difference in the speed in which your application goes through.

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Regards,



Scott Byrom

Utilities Manager

moneysupermarket.com

Scott,

Thanks for the clarification.I think the current saving from Atlantic to BG click energy 4 is £34.(for average consumption).Neither supplier has increased this rate as yet. Atlantic have said they will hold fire until after March.

For someone like me with above average consumption the scales tilt quite dramatically such that the cost of change to BG would be £136. Your system actually shows £119 extra cost due to rounding assumptions on off peak percentages.The major difference for a high rate user is on a large differential on the second tier electricity price per unit and the amount of discount available to high users is greater with Atlantic than BG.

I knew we would get to the bottom of it eventually. My strategy now is to wait until May when my annual refund is due and do a full comparison of the market after all the Suppliers should have shown their hand.In the meantime,fancy a game of golf? I'll play you for my monthly energy charges!!

I agree with what you say. However, I have waited for 28 days with no indication as to whether my application is to be successful. Money Supermarket failed to acknowledge my application originally and now, following my query, appear to think I should wait another 3 days for a reply. I would accept this as reasonable if I could at least be told that my application would be approved, but I have had no indication one way or the other and now face a price hike by Npower as it has taken me so long to switch. Surely it would be reasonable to expect MS.com to send an acknowledgement to customers electing to use their services. I find this lack of communication very disappointing.

Scott, the key word there was UP to 7%. From my wide experience of the Industrial and Commercial Sector, I know that 3 or 4% commission is more common in electricity and a general one pence per therm, which used to be the same thing but is now lower in gas was the going rate for consultants for "introducing" clients. I don't begrudge MS your fee, you have to eat too and you are much more honest than the pirates in I+C! In the I+C sector, where prices change every minute, the common practice among the big names in the industry is to charge the customer a fee and the supplier a commission. The rule is to try and deny it to the customer at all costs, the suppliers know what the deal is, but they figure it's a price they have to pay, and it's the same as any marketing cost. Going back to the domestic market though, each supplier has an average of over 12 tariffs! Not the most transparent offer in the world! Ofgem says it choice, I say it's a calculated attempt to confuse.