Connect with us
Gas Price Cap Gas Price Cap

News

Gas price cap set to end this weekend

Published

on

On 1 July, the measure that limited the price increase of the regulated gas tariff (TUR) will end and the new price in force for the next quarter, from July to September, will be known. What is foreseeable is that it will rise, after a quarter of low prices.

Therefore, even though it is summer and gas use might be lower than winter, it might be prudent to spend the weekend assessing your situation, and see if a cheaper contract can be found, paying attention to the risks that some offers might conceal, as the OCU consumer association warns.

To alleviate the situation caused by the war in Ukraine, when calculating the quarterly updates of the TUR, an increase of more than 15% was not applied to the cost of raw materials. This measure allowed many homes to reasonably weather the energy crisis that affected the gas supply. Since it was implemented, OCU has recommended contracting the gas TUR, since in the free market it was practically impossible to find rates that compete with it.

In principle, neighbourhood communities did not have the right to the regulated rate, so consumers with central heating paid much higher prices. These communities were also offered the possibility of contracting special rates for communities much cheaper than what could be found on the free market. Those special rates are in effect until the end of June, so they should think about what to do with the contracts from now on.

What to do from now on?

The end of this measure will differently affect users with an individual contract, who had taken advantage of the usual TUR, and the neighbourhood communities that had contracted the regulated tariff created especially for central heating.

If you are an individual user, you can maintain it

If you have contracted the TUR rate, it is foreseeable that the next price review will mean an increase in gas prices. During the last quarters, gas prices had fallen, and the limitation of raw material increases to a maximum of 15% had barely been applied. Therefore, it should not be too noticeable when it stops being applied, while demand is low as it happens in summer. Therefore, it is not foreseeable that a strong increase will be noticed and that the TUR will no longer be an attractive rate. You do not need to change your rate now if you have contracted the TUR.

However, you can start looking at the offers on the free market, now that gas consumption is still low during the summer. If you find a good deal for the next 12 months, it’s a good idea to sign up for it and make sure you’ll be paying that price during the winter, even if it’s a little higher than the current TUR. Keep in mind that the TUR is a variable rate and may (and probably will) increase when you start consuming more. Right now, the best rate on the free market is 20% more expensive than the TUR, but it may become a good price when demand starts to rise.

If you have not had the TUR contracted, you have probably been paying a premium during these months. The worst free rates easily double the TUR rate. You can change to the regulated TUR rate or use the OCU comparator and bet on contracting a good fixed price in case the market price rises.

The neighbourhood communities must leave the TUR now

If your house has central heating and your neighbourhood community was attentive, you will also have the TUR contracted. The outlook is not so positive, since July 1 the communities no longer have the right to the TUR rate and have to act, either through the president or the administrator. The communities that maintain the contract with the TUR rate marketer must change companies within a maximum period of one month, the time that the marketer is obliged to maintain their supply.

During that period of one month, a 20% surcharge will be applied to the energy they consume on the prices of the Mibgas wholesale market. Consumption will not be very high on these dates, but the surcharge is an incentive for them to wake up and look for a good rate.

It is not easy to compare gas rates for communities of owners, because administrators are normally presented with personalised offers based on their consumption, often with prices that depend on the evolution of the wholesale market. These indexed prices are a big risk because high consumption is concentrated in just two or three months and, if they coincide with a time of high prices, the bill can skyrocket. To opt for a rate of this type, you must pay close attention to how prices evolve when the heating season arrives and have a permanent rate to change if they start to rise.

Another option if you don’t want to be so attentive, is to look for an offer that maintains a fixed price throughout the year. To compare, several proposals must be requested and evaluated with the official TUR rates as a reference, since there is no reason for a consumer with central heating to pay higher rates than those who have an individual boiler.

Advertisement

Adverts

Subscribe via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Mark Nolan’s Podcast

Advertisement

Trending

PHP Code Snippets Powered By : XYZScripts.com
Skip to content