Gas prices to fall?

Gas prices are currently high and have been rising in the UK… however, British Gas is running adverts in UK newspapers offering “Fixed prices that fall in December 2007″. This might or might not show you the advert, depending on when they update it.

Which lead me to wonder if they knew something that no-one else does. However, looking at the small print Fix and Fall rates are at our current new standard variable prices from date of registration until the 3 September 2006. New standard variable rates apply from 4 September 2006. From this date or date of registration if later, until 30 December 2007 a discounted rate of 2.84% below our new standard variable prices applies for domestic electricity and a premium rate of 1.6% above our new standard variable prices for domestic gas applies. From 31 December 2007 to 31 December 2008 a discounted rate of 13.8% below our new standard variable prices applies for domestic electricity and the premium rate of 1.6% is removed. says something rather different… you actually get to pay a *premium* on gas prices, the discounts are on electricity (note to foreigners: in the UK, energy companies can sell you gas and/or electricity).

Still, its unclear why they are betting on electricity prices falling.

Comments

  1. #1 Adam
    2006/09/04

    Yet another example of how it’s best to read the small print. :)

    Centrica’s new 885MW power station should be coming online in 2008, and may have something to do with it. It’s gas powered, so the the new gas pipeline from Norway set to be up and running by 2007 will probably help there, too. There’s going to be less UK sourced gas around, but there will be a more diverse range of sources (see http://www.ofgem.gov.uk/ofgem/press/fact-sheets.jsp for some figures), which markets seem to like.

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