What can I do about rising gas prices?
Even with everything else going on in the world, it’s unlikely that you’ll have failed to notice that gas prices are going through the roof at the moment. It’s just one part of what’s being called a general ‘cost of living crisis’ that has seen the price of everything from petrol and food to transport and energy rise considerably faster than wages and benefits.
But it’s the cost of our domestic fuel bills that has probably caused most alarm, with a perfect storm of events conspiring to drive some people’s annual energy bills up by as much as £708 overnight, with fears of more to come later in the year. The story is just as bad for businesses, with rising energy costs eating into already squeezed operating margins.
But why is this happening – and, more importantly, is there anything we can do about it?
Why are gas prices going up so fast?
After the worldwide economic slowdown brought about by COVID-19, a resurgence in demand in 2021 led to a squeeze on supplies, which in turn led to a general rise in the price of gas across the globe.
By September, the wholesale price for gas had risen by more than 250% since the start of the year. Unable to raise prices to their customers because of the price cap, and without the gas reserves to see them through winter – when demand is at its highest – many of our smaller energy suppliers found themselves unable to buy supplies and were forced out of business. When Zog Energy collapsed on 1 December 2021, it became the 25th to go bust in just three months.
In the UK, it was already planned that the existing cap on gas prices would be raised in April and, under the prevailing conditions, it was decided that it could be lifted by 54%. From the point of view of the remaining energy suppliers, it was understandable that they would use the full permitted amount and they duly raised their prices to match.
According to OFGEM (Office of Gas and Electricity Markets), that would represent a rise of £693 a year for those on default tariffs paying by direct debit, while people with prepayment meters could see rises of £708 a year.
With the next price cap review due in October, things aren’t going to get easier. The war in Ukraine has led to a fresh squeeze on supplies – Russia has traditionally been one of the world’s biggest producers – resulting in more upward pressure on wholesale prices.
Experts are currently predicting that the cap could be raised by another £629 a year, meaning that a household on a dual fuel contract (i.e. gas and electricity from the same supplier) and using a typical amount of energy could soon be paying up to £2600 a year.
What can I do about rising gas prices?
While there’s not much any of us can do about worldwide demand or the war in Ukraine, we can moderate our gas usage at home by making sure that our appliances are working to maximum efficiency.
Old boilers and heating systems tend to use considerably more fuel than modern appliances, which are constantly being developed to operate in a way that means they cost less to run. Each boiler is rated for its energy efficiency on a scale from A+++ to G; most modern boilers have an A rating, which means that they operate at over 90% energy efficiency. At the other end of the scale, a boiler with a G rating is operating at 70% energy efficiency.
A study by British Gas in 2018 showed that switching from an old boiler to an energy efficient new one could save approximately £200 on annual gas bills – given where prices are now, that figure is likely to be considerably higher today.
If you think that you can’t afford to get a new boiler, don’t forget that you can easily spread the payments to make it more affordable – at A&D Plumbing, we have great boiler financing terms available over two or ten years.
If you can’t afford a new boiler, comprehensive boiler servicing could also make a considerable difference to how efficiently your boiler works. Our trained engineers have the knowledge and expertise to spot any developing issues and make sure your boiler is in the best condition possible. Of course, regular servicing also ensures that your boiler is continuing to operate safely, which is even more important!
Get in touch with A&D Plumbing now if you’re worried about rising fuel bills and want to know more about what we can do to make your boiler work better to save you money.