A sad day for the world
Genuinely sombre message from us at HUGO today. Like everyone feel shocked and saddened by the events in Ukraine. It feels a bit remiss to want to send out an email, but there is a direct impact on the energy price market which is likely to stay for a while.
The “Least Likely Scenario” is now the Only Scenario
In my email in early February I said rolling into the NEW PRICE CAP of 28p for electricity and 7p for gas was the “Least Likely” option and would require wholesale prices to rise above and beyond where they are. Sadly, the Russian invasion of Ukraine has done exactly this and now if your out of contract or coming out of contract this is probably your best option.
You can see via the HUGO app in the TARIFFS section the cheapest electricity tariff is 33p and the cheapest gas price is 8.74p, so much higher than the NEW PRICE CAP starting on 1st April 2022.
A friend of mine recently nearly signed up to a 2 year deal for 35p for electricity and 9.4p for gas. I talked him out of it by explaining he would be paying more than the NEW PRICE CAP.
The 1st of April 2022 NEW PRICE CAP of 28p and 7p for gas starts and is guaranteed for 6 months. So the only justification I can see for signing into a 2 year deal, higher than this, is because you think the next price cap might go much higher than 30p and 8p, so you think its better to be on a 2 year deal at a fixed rate, in order to know what your costs are going to be.
I personally don’t think that the cap can be increased beyond the NEW PRICE CAP as so many people will already struggle with the NEW rates and be launched into fuel poverty.
Those, however, are the dire choices and personally I’d roll onto the standard variable rate and not sign up to any deals. I truly hope things might settle and peace prevails soon, stabilising energy markets, but like many of you I’m not sure this is likely in the short term.