What’s happening in the energy sector? - KFM
We know there are massive increases in the cost of fuels for energy. 500 litres of oil at the moment is around €751 to buy. On 28th December, it was approximately €451. That’s a €300 difference in three months.
We know that petrol at the pump is up, with petrol going for €2.05 and diesel has been pictured at €2.07. The prices of fuel and food are increasing, and energy providers have been increasing prices.
Daragh Cassidy, Head of Communications at bonkers.ie, appeared on KFM to discuss the ongoing energy crisis and what consumers can do to combat never-ending price hikes.
Listen back to the interview above or take a look at the main points discussed by Daragh in the interview below.
What’s happening in the energy sector?
There are new reports today that Irish consumers are now potentially seeing a 50% hike in electricity bills.
What’s happening in the energy sector is absolutely crazy and there’s no way to sugarcoat it. It’s been a very difficult few months. Gas, petrol and diesel are all increasing in price.
Last year wasn't great for energy customers anyway. We spoke several times about the increase in prices. There were over 35 energy price hike announcements last year, and that was before the crisis between Ukraine and Russia kicked off, meaning prices are going to go up again.
Petrol and diesel are now at the €2 per litre mark, which we didn’t think we’d ever see. Gas and electricity prices are already at record highs. I fear that it’s only a matter of weeks before we see more energy suppliers increase their prices.
Why could we see a further 50% price hike?
What we need to look at are gas prices. In Ireland, we rely on gas a huge amount to generate our electricity. When the price of gas goes up, the price of electricity tends to go up as well.
Last year when the price hikes were taking place, gas was trading on the UK wholesale market at around 200 pence a therm or slightly below. At the moment it’s about 600 pence a therm, so it’s actually gone up by anywhere between 12-15 fold over the past few months.
And in 2021 when those price hikes were being announced, gas was only a fraction of what it was now. The price increases we saw last year were on the back of skyrocketing wholesale gas prices. Now unfortunately we’ve seen those price increases go up more.
What can consumers do?
There’s no easy solution. The first thing you can do is look at ways you can use less electricity and less energy around the home. The Sustainable Energy Authority of Ireland (SEAI) has lots of tips and tricks on its website about how you can use less energy. We also have advice on our blogs and guides pages on bonkers.ie.
Some of these steps are simple, such as changing your light bulbs to LED ones, tackling draughts and unplugging appliances when you’re not using them.
The second thing you can do is make sure you’re on the best deal for your gas and electricity, which you’ll only get if you switch energy supplier. While prices have gone up, and they may increase again, suppliers offer discount incentives to those who switch. Some discounts can be up to 30-40%, meaning you can still save by switching.
How can suppliers offer these discounts?
All suppliers offer discounted rates for new customers. Some may be loss leaders, or some might only make a little bit of profit, but all suppliers will offer discounted rates to try to attract new customers.
The energy market is no different. There are around 12 energy suppliers in Ireland at the moment. It’s quite competitive and they’re all competing for new business. They offer good discounts to people who switch.
What you want to make sure is that you’re not on your supplier’s standard rate, which is like the normal rate with no discount attached. According to recent research from the CRU, around 40% of people have never switched energy supplier. These people are definitely paying too much for their gas and electricity.
Gas and petrol prices
While it’s easy to switch gas and electricity suppliers, it’s difficult to avoid price increases when it comes to petrol and diesel.
A lot of the four courts charge similar prices, and while some may be charging cheaper prices, once you’ve driven to them it might not be worth it. There will be a lot of difficult conversations over the next few months and years about how we manage energy going forward.
We know we need to reduce our reliance on fossil fuels and this is obviously a perfect example of why. Of course, the higher rate of carbon tax is kicking in on gas in May. This is going to add another €20 per year to people’s gas bills.
Even food is going up in price. This is to do with Brexit and the shortage of lorry drivers, but also now there’s going to be a shortage of fertiliser because of the crisis in Ukraine and Russia. It’s unfortunate because you can postpone buying a car or going on holiday, but you can’t postpone buying food or heating your home.
Ways to conserve energy
There are many steps you can take to conserve energy and reduce your energy bills:
- Make sure your water cylinder is properly insulated.
- Use your dishwasher instead of washing dishes by hand. A full run of the dishwasher uses half the energy that you do when you wash by hand and uses several litres less of water.
- Opt for cool washes when you run your washing machine.
- Get an electricity monitor.
- Buy more energy-efficient appliances or LED light bulbs.
- Be careful about heating hot water you’re not going to use. Water costs money to heat, so you’re essentially throwing money down the drain.
You can view a full list of ways to reduce your electricity consumption in this blog, and take a look at this article to learn how you can heat your home for less.
Save on your household bills on bonkers.ie
If you’re looking to save on your household energy bills, we’re here to help. On bonkers.ie you can easily compare prices and deals for a wide range of products and services, such as energy, broadband, insurance types, and banking products.
To learn more about the services that we offer, take a look at this blog on 7 ways bonkers.ie can save you money on your bills.
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