Gas and electricity Updated:
You might not think that the Ukraine crisis would directly affect your financial arrangements, at least not in the short-term, but it could be time to think again. What about gas? Russia is one of Europe's biggest energy suppliers with it providing a quarter of the continent's natural gas, so there are definite fears that there could be a knock-on effect – and it could happen sooner than we think.
Potentially, yes. The Ukraine crisis has already led to UK wholesale gas prices increasing by around 10% for the next two quarters, and according to energyhelpline.com, the independent price comparison site, if energy firms see fit to pass these extra costs on it could equate to a residential price rise of around 5-6%.
Hopefully the UK won't feel the effects too soon, as a relatively mild winter has helped ensure current gas reserves are about 20% higher than last year, which should limit any short-term effects. However, if the crisis deepens and reserves are used it could mean an even bigger hike in wholesale gas prices – which could eventually lead to a significant increase in energy bills too, with energyhelpline estimating that a 20% rise in wholesale prices could equate to a 10% hike in bills.
Mark Todd, director of the price comparison site Energy Helpline, is concerned by the potential effects: " The likely short-term impact is that the cheapest deals will be pulled from the market and replaced by more expensive ones. If there is a long-term impact and wholesale gas prices remain elevated for several months, then we could see a return of gas and electricity price rises," he said.
It would be a definite blow to the market, and to energy customers who only recently got some positive news after years of price rises. Changes to Government-imposed green levies meant the average energy bill actually reduced, but if the Ukraine crisis deepens then these savings could well be short-lived.
While there's nothing that can be done to determine the impact on wholesale gas prices, there are things you can do closer to home to negate the effects. As well as making sure you cut your energy consumption by as much as possible, comparing energy tariffs could be a quick and simple way to save money on your bills.
Check out our comparison tool to see how much you could save, and consider switching to a fixed deal to avoid any short-term price rises.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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