CHEAPER fixed energy deals could make a comeback within weeks as wholesale gas prices continue to fall.
Experts have said that the price drop could mean deals that are below the price cap being offered to customers.
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“Millions of domestic customers” could be offered more competitive deals, analysts at energy consultancy Cornwall Insight said.
The return of these deals would also give households the freedom to switch suppliers and lock in prices.
Energy bills have soared since 2021 and suppliers have withdrawn their cheap fixed-rate tariffs.
Fixed-rate energy tariffs give customers bill stability over a set period.
Locking in the price means you can avoid bill hikes during that time. But you could end up stuck in a deal paying more if prices fall.
The majority of billpayers – around 26million – are now on standard variable tariffs that are subject to the cap.
That’s because suppliers have not been able to offer deals that are less than the price cap.
The government’s energy price guarantee (EPG), has frozen average bills at £2,500 a year.
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But as this is only an estimate for a typical household – if you use more energy you’ll pay more.
Now fixed deals could return as costs are falling, potentially saving billpayers money.
Kate Mulvany, senior consultant at Cornwall Insight said: “If supplier’s costs decrease and government-supported rates remain relatively high, it is likely we will see a significant revival in reasonably priced energy plans.”
The energy price guarantee will rise by a further £500 on April 1 – meaning a typical household on the standard variable tariff will end up paying £3,000 a year.
Suppliers could start offering tariffs for less than this.
Richard Neudegg, director of regulation at Uswitch said: “As we are seeing wholesale prices fall, it should start to be possible for suppliers to offer fixed deals that can beat the energy price guarantee level of £3,000 due from April.”
Cornwall Insight’s research suggests that the average bill could fall below this, to £2,200 from July.
Neudegg added: “It remains to be seen how competitive these deals will be, especially with the regulations currently making it even more difficult for suppliers to offer decent prices.
“Consumers should in principle have the option to choose longer-term fixes to help with budgeting, just as they can with mortgages. It shouldn’t be acceptable for these options to be artificially suppressed.”
But there are concerns that some suppliers might be hesitant to launch cheap fixed deals because they have to fork out when taking on new customers if wholesale energy prices drop more than 10%.
