Energy prices

Prices for wholesale gas and electricity are only a small proportion of the bill. Other cost factors are metering, distribution, cost of the business profit and of course VAT. Standing charges also do not necessarily need to rise.

From Bulb’s blog -

Wholesale energy costs typically make up around 40% of your bill
I wouldn't class 40 percent as a 'small proportion'.

I have long thought that standing charges are an obstacle to competition in the industry. I understand what they are for, but to my mind it would be fairer if they were combined into the unit cost. Varying standing charges across suppliers make true comparison difficult. For a low user such as myself, they make up a disproportionately large portion of my bill. i suspect many have no clue at all about them, yet they can make up half your daily cost at times of low usage.

If suppliers were forced to sell energy at unit prices only, comparison would be as easy as grocery shopping or buying petrol- you know exactly which supplier is cheapest. Personally, I’d take it to the logical extreme by abolishing dual fuel discount etc as well. Suppliers could offer incentives to join and fixed tariffs as now but otherwise only be allowed to charge per unit. I’m no mathematician but I’m pretty sure another advantage would be that the most vulnerable users would end up paying less- the little old lady with a one bar electric fire she is scared to turn on would suddenly find herself up to 60p a day better off depending on her supplier and thier current standing charges. even with slightly higher unit prices as a result, this would be enough to pay for three or four hours of extra heat…

@M32 As wholesale costs are not 100% of your costs if there is a 10% increase in wholesale costs we would only increase your bill costs by
the appropriate amount.

For example:

£40 is wholesale
£60 are other costs

after a 10% increase in wholesale costs:

£44 is wholesale
£60 are other costs

which means a 4% increase in your bill.

We only pass on fair savings, we don’t increase prices more than we need or have to.