UK gas price crisis: The price comparisons with nothing to compare
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UK gas price crisis: the consumer price comparisons with nothing to compare

By Matthew Farmer 28 Sep 2021

While UK energy utilities near breaking point over the price of wholesale gas, the next phase of the crisis will hit consumers.

UK gas price crisis: the consumer price comparisons with nothing to compare
Price comparison websites have shown the destruction of competition between utilities.

While UK energy utilities near breaking point over the price of wholesale gas, the next phase of the crisis will hit consumers.

Utility companies cannot currently pass on rising gas costs to consumers because of a price cap set by regulator Ofgem. The regulator adjusts the price cap twice per year, with the next adjustment due from 1 October. This will raise the amount that companies can charge consumers, though it will still remain below current wholesale prices.

Consumer rights bodies have warned over recent months that energy bills will likely rise with the tariff cap. From Friday, the maximum tariff will rise by 12% to its highest point since the introduction of caps in January 2019.

A pale comparison of price

Many consumers rely on price comparison websites to find the best deal in their area. These websites have been credited with encouraging market competition, resulting in lower consumer prices. However, most websites currently portray the scale of problems in the market.

Depending on their location, consumers would usually receive several results when running a search, up to 20 in some metropolitan areas. As a result of recent energy concerns, Power Technology ran a series of sample searches across the UK’s five most populous cities. These used a range of payment methods, consumption rates and network areas across multiple Ofgem-accredited comparison sites. Across all searches these returned a maximum of four results.

Break down of successive Ofgem price caps
The Ofgem price cap will soon rise to more than £1,300 for direct debit tariffs. Credit: Ofgem.

These results came only from the most business-friendly test cases, with low-consumption households paying via direct debit. Most tariffs offered a loss when compared to average household rates. Some comparators offered no tariffs in any sample case, and other sites have paused comparisons entirely. None of the “Big Six” energy firms offered a connection service in any case.

While equivalent searches differed between different comparison sites, some examples include:

  • An average house in suburban Leeds using a standard dual-fuel tariff receiving three offers, costing at least £986 per year more via Money Supermarket.
  • A four-bedroom Glasgow household receiving four offers from the same company via Runpath. Each tariff would charge between £650 and £820 more per year.
  • An average Birmingham household receiving no available price plans via Uswitch. The website did show several plans that would offer a saving, although none of these currently accepts new customers.
  • A detached house in a London suburb receiving no offers from Energy Helpline. Before searching, the website warns users that energy deals have “dried up”.

Most comparison sites have marked their searches with a warning to consumers about the state of the market. One website, Compare the Market, has paused price comparisons entirely.

Uswitch energy policy spokesperson Justina Miltienyte said: “Soaring wholesale prices are making conditions difficult for all suppliers, but challenger brands in particular are struggling to make ends meet.

“Affected customers will be moved onto new suppliers appointed by Ofgem, but for now they should sit tight and wait until their account is transferred to the new provider before trying to switch. Customers can be reassured that their energy supply will continue as normal and any credit balances they have built up will be protected.

“We recommend that customers of defunct utilities make a note of their meter readings now, and again when contacted by their new supplier, to ensure bills are accurate.”