Fuel costs, energy costs explained - October 2022
Where you live and how you pay affects the price of your energy, says Paul Lewis
From this month the Government says the typical household energy bill will rise to, on average, around £2,500 a year and prices should not change until October 2024. The exact amount you pay will depend how much electricity and gas you use, but overall energy bills this winter will be around double what they were last winter.
Starting now, the price cap on household electricity and gas has been replaced with the Energy Price Guarantee. This fixes the price of units of electricity at 34p each and gas at 10.3p (including VAT at 5%) for dual-fuel consumers paying by direct debit. However, the weird regional structure of the industry means these prices can vary slightly, according to where you live – electricity prices by just over a penny a unit, and gas unit prices by about a tenth of a penny each way. So people living in the most expensive region – called North Wales and Mersey – will typically pay £66 a year more for their electricity than those in the cheapest region – North West.
Car finance - get a free quote today
Save on your home insurance - get a free quote and compare
There are separate rates for Economy Seven, and some providers have special rates for anyone using electricity at night. The difference for gas is smaller, but people in London pay most – typically £25 a year more than those in the cheapest region, Northern.
The price also depends on how you pay: pre-pay electricity rates are slightly less than the direct debits quoted above, gas rates slightly more. The most expensive rates are charged to people who pay their bill quarterly. On top of the unit price, the standing charge will also be fixed. It
too varies, depending on where you live and how you pay. Prepayment meters have higher standing charges, and the most expensive charges apply to people who pay quarterly – switching to monthly payment will save you money.
The Government will provide funding to help people who use heating oil or LPG (Liquified Petroleum Gas), who live in mobile/park homes, or whose rent includes an element for their energy bill. In Northern Ireland the previous price cap did not apply, but a similar Energy Price Guarantee will be offered there when political wrangling allows.
QUESTIONS? Send any questions to Paul.Lewis@radiotimes.com. Paul cannot answer you personally, but I will reflect them in his column.