ENERGY firms are charging up to £800 more than the energy price cap, as it emerges new fixed rate deals are hitting the market at high prices.
Gas and electricity prices are soaring as Government ministers admitted spiralling costs meant some families will face a choice between “eating and heating” this winter.
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According to EnergyHelpline, the most expensive fixed deal on the market currently is a hefty £2,125 a year. The same provider does have cheaper tariffs, however.
A number of new fixed deals have also emerged this week with prices considerably higher than the energy price cap.
Martyn James of consumer rights firm Resolver, said: “The energy price cap was introduced to stop firms profiteering, but that doesn’t work when wholesale gas prices triple.
“This is a nightmare scenario for households worried about their bills and budgets.”
Many households were already panicking about an increase in the energy price cap at the end of the month, which will add an average of £139 a year to household bills.
Customers hoping to lock in a better deal before the increase have been left disappointed as providers have been pulling their best fixed tariffs from the market.
Comparison site ComparetheMarket even froze its switching tool because it said there were not enough good quality deals to show to its users.
Now it has emerged that energy providers have ramped up the annual costs of their dual fuel deals to as much as £1,900 a year.
That’s £624 more than the price cap of £1,277 that will take effect on October 1.
Unprecedented times
It means that an unusual situation has arisen where households on their provider’s default or standard variable tariff will be better off than those locking in to a fixed deal.
James said: “This is unprecedented in recent times
“It’s impossible for consumers to know what a fair price is. The only thing they do know is that they’re going to be paying more.”
The pricey deals are more than double the average annual bill of £850 in 2020.
Ovo Energy launched their ‘Better Smart 17 September 2021’ tariff this week which has an annual bill for the average user of £1,863.8, according to MailOnline.
According to EnergyHelpline, the cheapest fixed deal currently available is from Green Energy at £1,207 a year, while the cheapest variable deal is £1,081 a year from Utility Warehouse.
Struggling to cope
The price increases come as energy firms struggle to cope as wholesale gas prices have risen 250% since January.
James said that firms which had been better prepared will have saved money while prices were cheaper so they don’t have to rush to ramp up prices.
But he added: “In all likelihood, every energy company will increase its prices – the question is, by how much and will they survive?”
Five firms supplying 700,000 households have gone bust in the past six weeks: Hub, PfP, MoneyPlus, People’s and Utility Point.
Bulb, which has 1.7m customers, has asked for a Government bail-out.
Small energy firm Green has become the latest provider to be reported as being on the brink. If it fails it will leave 250,000 customers without a supplier.
It is predicted that several other small suppliers could go under within weeks and in the worst case 60 could go under by the end of the year, which would leave only 10 suppliers in the UK market.
Household bills are already at record levels and will stay high, probably until at least October 2022.
That lack of competition in the market could force prices up further for families.
Here is everything you need to know about the gas price crisis.
Kwasi Kwarteng states 5-8 energy companies could go bust this winter
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