Price increases

I am also confused by the differing percentages for wholesale gas cost and increased gas unit price. And I think there is further detail missing. I believe that your unit price covers the cost of gas and the cost of delivering that gas. The wholesale gas cost is only around half of the total cost of gas plus delivery. If correct, that would mean an 18% increase in the cost of gas should only contribute a 9% increase in the unit price of gas. Can I suggest you explain what components make up your unit cost of gas and how they are changing.
Also, has anyone else wondered why gas and electricity prices move so much, so frequently, unlike pretty much any other good or service we buy?

This is the second price rise in under 6 months. And the later is 18%. If I put prices up that often and by that much, there would be a national outcry (I work in railways…). There is NO justification for such a rise. What evidence can Bulb give us that they are different from the other suppliers as I can’t see any?

I think @NeilA poses a very interesting question above, and I see that no one from Bulb has yet responded.

I too would appreciate any input as to the make up of your unit gas total costs (i.e how much comprises the wholesale cost of gas and how much comprises distribution or any other costs). Thanks.

I think I can maybe take a guess at the answer.
In the summer, Gas was around 42p per therm, which is about 1.45p per KWH. Network Costs, Distributor costs etc are about 1.6p. Add VAT @ 5% and you arrive at 3.2p per KWH. Roughly what we were charged earlier in the year?
Current winter prices (If you haven’t purchased before the current rise, are 2.8p per KWH (See https://www.theice.com/products/910/UK-Natural-Gas-Futures/data?marketId=142528&span=3 ). Add 1.6p running costs and 5% VAT and you get to 4.6p per KWH.
Bulb are currently charging around the 4p mark, so I guess they bought forward and/or hoping prices will drop. Otherwise, expect further increases from all suppliers.
GRHH, maybe you can see why prices have risen, and blame the wholesale market / Brexit / Government / Market Forces / Speculators / Trump, but not Bulb!
PS: I don’t have anything to do with Bulb, other than being a customer.
PPS: Maybe the best thing to do is buy shares in whoever is supplying Gas to the market. Must be making a fortune!

This gives you a graphic of a bill breakdown (From OFGEM).

Hi @PaulMC12345, thanks very much for the information.

Yes, the figures you provide do seem to account very accurately for the recent increases in price which Bulb has had to introduce.

In view of the fact that Bulb like to give comprehensive information to their customers, I wonder if in future they could give a similar kind of analysis when they need to raise (or lower!) their prices. It may go a long way to reducing the the “misunderstandings” which have been so prevalent in the forum lately.

Hi @NeilA @GRHH @PaulMC12345 @AnthonyO Thank you all for these wonderful questions and insights. It great to see a conversation like this about energy prices. I think the key question coming from this post is ‘why are energy price increases higher than they have been before’

I have borrowed a piece from the blog that might help to explain this:

'Wholesale energy costs have gone up substantially since June 2018, continuing the trend we’ve seen throughout this year. These costs are now 15% higher than they were just last month. Over the past year, wholesale energy costs have risen by nearly 50%. Following our Price Principles, we’ve been slow to pass on these costs to our members. We’ve held off for as long as we can, but we aren’t able to put off an increase any longer. ’

Traditionally we’ve slow to put up energy costs, however this time we’ve had to make up some of the ground on the increasing prices. In previous price increases, we kept the price of our gas tariff lower in some regions to limit the impact for members hoping that costs would decrease. But unfortunately, wholesale costs have continued increasing so we aren’t able to hold them back any more.

This is why your price increase may be higher than the average. We’re sorry that we had to raise our prices. We really don’t enjoy doing it. The recent increases in energy prices, particularly gas, has forced us to raise the prices.

We have tried to be as transparent about this as possible, if you want to read more please have a look at this blog http://bulb.co.uk/blog/energy-price-watch-changes-to-our-energy-prices-sept