Seen as wholesale gas & electricty prices reduced by almost 10% in December, why hasn’t the reduction been passed on to customers?
You’re right, gas prices have decreased significantly. In fact, we wrote about this in our winter price watch blog post.
As soon as we can reduce everyone’s bills by £20 per year, we will.
We review our prices every week When costs fall by more than £20 per year, so will your tariff If they rise, we work hard to limit cost increases to you and we’ll always give 60 days notice of a price rise</div>
Most providers give 30 days - the Ofgem minimum.
@“Eleanor at Bulb”, that’s not quite what has been said previously although it’s always been kept vague.
We review our prices every week When costs fall by more than £20 per year, so will your tariff
Can you explain exactly what “costs” are?
I presume that even if wholesale costs may have dropped to a level that is potentially simiar to that which has previously given price reductions, Bulb may have seen an increase in member costs due to WHD, ECO, Smart Meters and everything else they now have to deal with?
As soon as we can reduce everyone's bills by £20 per year, we will.You could theoretically do this at any point!
@198kHz Ofgem do require all energy suppliers to give at least 30 days notice when their prices will be increasing. We give 60 days notice if our tariff is increasing because we want to give you plenty of time to decide if you want to switch away, or ask questions.
It’s not quite the same for a price decrease. We’re not obligated to let you know if our tariff is reducing. We think you’ll be pretty happy not to have to wait for another 60.
@mowcius I sure can.
Wholesale costs are biggest contributor to the decision. In fact, wholesale costs make up 40% of your annual energy bill. Although they have been decreasing, we need to be confident they are going to stay low, for a little while at least. We don’t want to lower your tariff and then have to increase it again straight away.
You’re right though, as Bulb grows we take on more network and policy costs. WHD, ECO and smart are examples of these.
But we also have operational costs. As we continue to improve our technology and become more efficient at serving our members, oporational costs decrease.
So it’s all a bit of a balancing act.
I guess we could theoretically lower our tariff whenever. But that would not be a good business decision. For you or for us!
Wholesale costs are biggest contributor to the decision. In fact, wholesale costs make up 40% of your annual energy bill. Although they have been decreasing, we need to be confident they are going to stay low, for a little while at least. We don't want to lower your tariff and then have to increase it again straight away.This is completely understandable and what I expected, however what has previously been suggested about when prices will go down may be giving people the wrong idea.
Giving two months notice for price rises but dropping them immediately surely pretty much necessitates that you wait for at least two months of lower prices to balance things out.
You're right though, as Bulb grows we take on more network and policy costs. WHD, ECO and smart are examples of these.
Sure. But isn’t it the idea the the standing charges cover these costs? i.e., as Bulb gains more customers, they also gain more income from standing charges and this should balance.
Changes to the unit rates and wholesale costs should be independent to variation in any other costs. That’s the whole point of having two distinctly separate charges rather than just rolling everything into the unit rate.
@Hooloovoo, I think it’s more that previously they were a small enough supplier to not have to spend the money on WDH, ECO etc. whereas now that they’re larger, they’re mandated to do so. Going forwards your points will apply, but right now I suspect they’ve had to invest considerably to prepare themselves and set aside some cash for the schemes.