Igloo Energy hikes prices for a second time this summer, British Gas to freeze standard variable tariffs direct debits
Igloo Energy has announced that it will be raising its prices for the second time this summer as wholesale energy prices continue to climb. British Gas meanwhile has said that it will freeze direct debit payments for its standard variable tariff (SVT) as it assesses the situation of the market.
Why are energy suppliers raising prices?
Igloo energy has blamed the highly volatile wholesale energy market for the need to raise prices for their customers. In July the company already increased prices by 12% but as the market continues to remain extremely volatile it has been forced to make another rise.
Since the beginning of 2021, the price of gas has soared by over 180% and from the record lows recorded in 2020 as a result of the Covid-19 pandemic and lockdowns prices have skyrocketed by over 610%.
As lockdown measures eased across the globe and economies reopened demand for gas went through the roof. An extremely frigid winter and incredibly hot summer in some parts of the world also added to the surge in demand.
Another issue is the competition in the market. Nations from around the world are all competing for a share of the limited gas supplies available and the UK, in particular, has been hit hard due its reliance on gas power stations to generate electricity. As a result, electricity prices have soared by a staggering 265% since last year.
“Every energy supplier is affected by this, and you may have recently seen that Ofgem is significantly increasing the price cap this winter which will impact homes across the UK with increased energy bills.
We never take the decision to increase our prices lightly. We try to consider our customers in every decision that we make, and we recognise that increasing energy bills can be difficult for many,” said Igloo Energy in a blog post on its website.
Will wholesale energy prices remain high?
A new report published by Imperial College London and commissioned by Drax warned that rising energy prices will push 500,000 households into fuel poverty over the winter.
However, some experts are predicting that wholesale prices could see something of a retreat in the coming months due to the possibility of improved gas supplies arriving in Europe over the next few weeks.
There is also hope that an Indian Summer could be on the way later this month that will help supply as fewer people will need to use their heating.
If wholesale prices do drop energy suppliers will be able to react and pass on any savings to their customers on variable tariffs.
British Gas plans to freeze SVTs until February
British Gas has announced that it is planning to freeze direct debit payments of its customers on its SVTs until February.
“We understand that the price cap increase comes at a very expensive time of year for some of our customers. The furlough scheme which has helped millions of people is coming to an end, parents are getting children ready for a new school term and Christmas is on the horizon.
“Freezing direct debit payments until after winter will keep an extra £50 in customers pockets. We want to give our direct debit customers the option to create a bit of extra financial breathing space if they need it,” said British Gas in a statement.
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