Households could see their winter fuel bills increase by GBP60 if the cold snap continues into February, but reports that energy prices could go up are a red herring says uSwitch.com, the independent price comparison and switching service.
It costs £3 a day on average to heat a home, but uSwitch.com estimates that this could increase by GBP1 a day as consumers contend with the current freezing conditions. If the cold snap lasts a fortnight it will add GBP14 on to household winter fuel bills. But if it lasts two months it could cost households an extra £60.
However, reports that household energy prices could go up as a result of increased demand are misleading – energy suppliers buy their energy around a year in advance and can meet the current short-term increase in demand by topping up on the daily spot market. This means that consumers do not need to worry about their prices going up in the short to medium term.
Tom Lyon, energy expert at uSwitch.com, says: “If the cold snap continues through February it could add £60 on to household energy bills, but the cold snap would have to continue for far longer to have an impact on energy prices. Higher demand because of sub zero temperatures and the current rationing of energy to certain businesses does not mean suppliers will need to increase household energy prices. Hopefully this will reassure consumers, but our advice would be to think now about budgeting for an extra £60 for when the winter fuel bill drops through your letter box.”