Energy war could put €1k in your pocket!
…and there’s no dual fuel penalty, so switching is easier than ever
Bord Gáis comes out on top in the latest shake out of the energy market. Three suppliers cut their rates in the past two weeks… but it has emerged as the cheapest provider offering savings of up to €1,157 a year if you switch both gas and electricity.
Electric Ireland, despite also cutting rates this week, is fourth for dual fuel and gas prices – although it is second place for electricity.
And newcomer Yuno, which got the latest round of cuts underway last week, lies in fourth place at this stage in the cuts cycle, according to a survey on comparison site Bonkers.ie
SWITCHING IS KEY
If you switch electricity alone, you’d save €749 with Bord Gáis, €725 with Electric Ireland and €711 with Flogas compared to the dearest provider.
But you could still save a sizeable sum – up to €706 – by switching to the fourth-placed deal, which is Yuno’s fixed rate. So the important thing is to switch.
Savings on electricity are compared to the dearest providers. At the moment, these are Prepay Power for gas and Pinergy for electricity, according to comparison website Bonkers.ie. But that may change at any time as price cuts arrive ‘thick and fast’ in a competitive market.
LONG OVERDUE
The maximum savings for gas switching is €408.
Wholesale gas and electricity prices fell significantly last year and this drop is finally being passed on to consumers.
‘A relatively mild winter has meant that gas use has been lower than normal in most of Europe and therefore storage levels are high,’ said Daragh Cassidy of Bonkers.ie. ‘And as we use gas to generate around 40% to 50% of our electricity, this also helps reduce our electricity prices. Strong wind output has helped keep a lid on electricity prices in recent months too.’
However wholesale gas and electricity prices are still close to double normal levels, he added.
At least the market seems to be getting back to normal after the
Source: bonkers.ie volatility that followed Russia’s invasion of Ukraine, which saw competitive discounts for switchers dry up. The tables (above) show that discounts are once more a feature of the market, albeit at 20% compared to 50% previously. These discounts typically expire after your contract is up. And bear in mind that even if your contract isn’t finished, it might be worth incurring the break fee (usually around €50) to switch to a more competitive supplier.
It’s handier to get a dual fuel deal but suppliers know this so they usually charge more for the privilege.
However, our energy report this week shows exactly the same saving whether you go with a dual fuel deal or separate providers.
If you get gas and electricity separately you could save up to €1,157 – the same saving as a dual fuel deal.
Potential savings will differ compared to the rate you are on and whether your contract has expired.
So where do prices go from here? ‘If wholesale prices remain broadly where they are I’d expect a third round of price cuts from all the main suppliers of around 10% to 15% in the second half of the year,’ Mr Cassidy said.
‘This would mean gas and electricity prices would have fallen by
around 30% to 35% since October when prices were at their peak. However it would still leave prices around 40% to 50% above what would, until recently, have been considered normal levels.’
MIDDLE EAST
But householders hoping for further price reductions could face an anxious wait as renewed conflict in the Middle East raises tensions. The price of oil briefly spiked last week as the crisis in Yemen worsened though it has been relatively steady since then.
But if tensions rise further, so could energy costs. This week motorists group the RAC warned that petrol and diesel could jump by more than 4c a litre in weeks.
Geopolitical risk consultant Simon Watkins warned of even higher oil prices.
Iran and Russia profit from higher energy prices due to conflict and have every incentive to keep stoking it. ‘It is certainly what Iran wants. It may also be what Russia wants,’ Mr Watkins wrote on industry website Oilprice.com
‘But whether it is what China wants is open to question, and the answer to that will determine where war[s], oil prices, and security across the Middle East go from here.’
Mr Cassidy agreed that energy price cuts depend on the stabilisation of international conflicts. ‘If there’s a major escalation of the war in Ukraine, the Middle East or the Red Sea, any further price cuts this year [in energy bills] would be off the table.’