Are Energy Prices Rising Again?

With house prices stagnating and the cost of oil and food rising, the credit crunch took a turn for the worse when energy giant British Gas announced that its customers would face energy price rises of 35% on the cost of its gas and electricity. It’s a sure sign that energy prices as a whole are rising again – and this time to all-time record levels.

Energy Prices In The News

British Gas joined EDF to become the second energy company to increase its energy prices for the second time this year. According to energy comparison website uSwitch.com, the average dual fuel bill will cost £1,322 if you’re a British Gas customer, compared to £1,055 before the price rise and £912 before the tariff rose at the beginning of 2008.

According to uSwitch’s Ann Robinson the increase is “the second nail in the coffin for affordable energy. With every price increase we are edging closer to household energy bills hitting a record high”.

It’s not rocket science to conclude that other major energy companies – npower, Scottish and Southern Energy, Southern Energy and E.On – will follow suit and raise their prices too.

Why Are Energy Prices Rising Again?

With the economy looking unsteady already – and most of feeling the pinch one way or another- this latest energy price rise comes at a bad time. So why are energy prices rising again? It’s all down to the wholesale cost of natural gas and oil on the market, and the way energy companies buy their share of natural gas. Centrica, the parent company of British Gas, cites several global factors leading to the recent rises:

• A decline in natural gas production in the UK – the science is lagging behind the demand
• An increased reliance on overseas gas import
• Record oil prices have led to record forward gas prices
• Increased demand for oil and natural gas from rapidly industrialising countries such as China and India
• The fact that energy companies purchase wholesale gas and electricity several months in advance

How To Beat Rising Energy Prices In a Tougher Economy: Go Green!

One way to combat higher energy bills is to reduce how much energy you use by becoming more environmentally friendly in the running of your household. Saving energy helps tackle climate change and the credit crunch simultaneously, and there are plenty of easy ways you can improve your energy efficiency – with both short and long term savings.

Here are few quick tips to help you reduce energy prices in your home:

• Don’t use electrical items unnecessarily
• Turn all items off at the mains; don’t leave them on standby
• Fit an insulating jacket around your boiler
• Draught proof doors, windows and walkways
• Turn your thermostat down a degree or two – or off completely during warmer months

Rising energy prices mean that even larger investments in your home’s energy efficiency will pay for themselves more quickly through the savings you’ll make. Installing cavity wall insulation pays for itself after two years, loft insulation can slash 20% off your annual bills and purchasing an energy efficient boiler can reduce your bills by up to £200 a year. Look out for government backed loans and grants to help you make your home more energy efficient.