Independent energy suppliers to hike up prices and blame it on rocketing wholesale energy prices
According to the latest buzz, independent suppliers in the UK energy market may face a roadblock and exodus of customers. This is in the wake of the rising prices of wholesale energy and backing it up is the increased barrel prices of oil. Although these are playing underlying roles, smaller independent energy suppliers would face a tough situation as they would be compelled to increase the prices of energy.
Until now, the big six energy suppliers faced a tough competition from the independent energy market. However, as the big suppliers purchase wholesale energy in advance that is around a year or two back, they can still push off the price hike. They can sustain without increasing the energy prices but this might not be the case with smaller companies and so, they have to give way to energy price rises.
The straight reaction to increased energy prices would be mass switching as customers would search for affordable energy suppliers. Some of them have already hiked the prices like Ovo Energy, which announced an increment of 7.6% in its monthly tariff in June and 3.6% in August. This way Ovo Energy customers have to pay £95 more on their annual energy bills.
This kind of price rise would result in customers switching to another energy supplier. Therefore, independent energy suppliers may face big issues while dealing with the wholesale energy price rise. Energy experts suggest that it would be the ‘Big Six’ and other bigger energy suppliers that stand a chance in dealing with this scenario. As they have the funds to postpone price hikes and win back the customers. All we can do is wait and watch until the energy market gets stable.