Is the energy price cap actually helpful?

I understand the original point of the energy price cap when it was introduced by the last Conservative government was to prevent British Gas and the other big suppliers from overcharging vulnerable customers on their rip off standard variable tariffs.

Now though the wholesale costs have gone way above the price cap so it’s now being used by Ofgem to force suppliers to sell energy at a loss through the entire winter. This is surely not what the policy was envisioned to do and it will lead to many suppliers being completely unable to survive. Thirteen have gone under this year alone! I can only see this leading to a more expensive and less competitive market in the future which is dominated by a few heavily-indebted large suppliers. Not good for consumers, not good for the energy market.

I’d like to hear from people who think it’s a good idea though because presumably the government has its reasons to keep the price cap. Energy poverty is bad and getting worse, energy companies have the balance sheets to support the market through the spikes maybe? I’m not convinced but what do you guys think of the continuation of the price cap?

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With the way things are going - everybody will back to the Big Six again unless there is some intervention. I feel bad for the energy suppliers that cannot hedge as much supply and are having to close - this is manageable for suppliers with large stakes and it’s seeming more of a ploy to get customers back to the big boys.

This is bad for market competition, but the price cap has safeguarded everybody from paying those extremely hefty wholesale prices.

For 6 months, because the cap will almost certainly go up next April.

Possibly longer for some - those who managed to get a fixed deal just before the current cap went up from a supplier who’ll survive long enough to honour the deal in full.

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Yep - I tried to but BG gave me that Profile 00/Measurement F crap when trying to switch to a fixed deal before the crisis. I was meant to be with BG yesterday, but I was last minute informed that they wouldn’t move people with HH over :confused:

It’s likely we’ll see the cap quite high for supplier’s to recoup the wholesale surge, unlikely to go down for a long time :roll_eyes:

Exactly. Someone has the pay the bill at some point and it’s going to be consumers. As terrible as this situation is, it will be better imho to pay the tab now than accrue debt to pay it off later. We need to support those on low incomes who can’t afford this short-term (hopefully) spike. Then we’ll be left with an intact competitive energy market after prices fall again so those people on low incomes can benefit from switching to cheaper suppliers rather than being stuck with a cartel of massive expensive suppliers…

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