Fixed tariffs could be more expensive for consumers

Energy industry consultant Cornwall Insight has warned that customers could end up paying £130 more on their energy bills this year if they take up one of the fixed energy tariffs that are currently available.

While Ofgem is still in the process of monitoring the wholesale markets in order to calculate the new energy price cap that will come into force in April, Cornwall Insight has forecasted that it will likely be reduced by about 16%, bringing the average dual-fuel bill for an average UK property down to £1,620. In contrast, someone signing up for the cheapest fixed-price deal currently available will end up paying £1,753 for the same energy usage.

Cornwall Insight Analyst James Mabey said that it may be tempting to sign up to a fixed-price deal that is cheaper than the current price cap, before adding:

“However, there is a risk these deals might not translate to actual savings come April, when a significant decrease in the price cap is projected. It is important consumers weigh the immediate appeal of a slightly lower price against the potential for larger savings down the line.”

He also added that suppliers may offer more competitive fixed-price deals in April once the Market Stabilisation Charge expires on March 31.

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