Rising wholesale costs led to price increases across the board this year
The wholesale prices for energy – what suppliers pay for gas and electricity – have risen massively this year. Wholesale electricity prices are now at their highest level since 2008 and have risen a whopping 50% since the start of the year. Wholesale gas prices are now at their highest level for at least three years and have more than doubled since the beginning of the year.
Unsurprisingly, all of this results in energy prices, including the prices of the cheapest deals on the market, rising over the course of the year. In April, regulator Ofgem raised the energy price cap by an average of £ 96 / year and experts have forecast a further increase of £ 112 / year if the price cap is adjusted again on October 1st. And at the start of the year, the cheapest annual fix averaged £ 888 / year, while the cheapest now is £ 1,030 / year (including MSE cashback) – a jump from £ 142 / year.
How will the price of igloo compare after the hike?
Igloo has only one tariff – a variable tariff called “Pioneer” for dual-fuel and electricity-only households that pay by direct debit. With normal use, the price increases by £ 111 / year, from £ 967 / year to £ 1,078 / year, although the actual cost will of course vary depending on where you live and energy consumption.
Igloo’s new price from August will now average just £ 60 / year below Ofgem’s current price cap of £ 1,138 / year based on typical dual fuel usage. However, we know the cap will change in October – and compared to the new price cap projected by energy analyst Cornwall Insight, the new price of Igloo will be £ 172 cheaper per year.
The table below shows how Igloo’s new price compares. As Martin explained above, there are much cheaper variable deals out there right now, but there’s a good chance that prices will go up with those tariffs. Alternatively, you can save around £ 50 a year by switching to the cheapest fixed rate on the market. To find out what you can save, do a full comparison on our Cheap Energy Club.