Am I the only person to be asked to increase my gas and electric prices voluntarily?
I have been offered by BG (my suppliers for both gas and electric) a chance to increase my electricity bill by 2.25% and my gas bill by 3.5% from their current prices and they (BG) will fix the price until April 2007(VAT alterations do not apply).
What is the catch?
Adam
Do you buy lottery tickets at all?
In effect what you are buying with these schemes is a future and these are traded like any other commodity.
If you go for these, then it enables the supplier to in turn buy futures of the commodities and hence fix their costs into the future. This is attractive for them. Of course they can't hedge VAT.
Equally, you can bet that the rates for futures that they will buy will be more favourable for them than what they are offering to you - i.e. they will make a margin on the trade.
On the other hand, if you do nothing, you are assuming the risks of price increases over the period.
So I'd say, if it's attractive to you to hedge against price increases (assuming use is constant) then these deals might be attractive. Otherwise you are taking the risk with the market.
Either way, it's worth shopping around and switching suppliers anyway if you want to minimise cost. It then depends on whether you want tto invest time to do that.
They are very expensive to begin with.
They wouldn't make such an offer unless they thought there was a high probablility of an upside for them either in terms of increased income or customer retention.
Re-calculate the odds from your own point of view , and the balance of probability is that your better off declining their offer and shopping around.
MBQ
After looking in the small print, the catch is I start paying the increased price now which will remain above the standard price until April 2005. Then the price is fixed. Look out for a price rise just before April.
Adam
In message , ARWadsworth writes
And paying a higher price over a winter period, probably 60-70% of your annual usage?
Shop around.
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