Energy firms press customers to sign up for premium-rate tariffs

Published 15th Dec 2008

Leading energy firms are encouraging households to sign up to fixed-rate gas and electricity contracts, at premium prices per unit, even though costs are expected to fall in the new year.

Many experts predict household energy bills will fall by between 10% and 20% in early 2009, reflecting steep declines in wholesale gas and electricity prices. But customers on fixed-price contracts will not benefit.

In a mailshot, EDF Energy urged customers to pay a premium rate in exchange for a fixed price until October. "If you hurry you can fix your prices until October next year with our price protection 2009 tariff, from as little as £1.89 extra a month - giving you peace of mind as well as great value," the mailshot said. "This offer is available for a limited period, so act now."

The British Gas website is promoting a gas and electricity tariff that offers a fixed price until January 2012 and carries a "best buy" rosette.

The deal is advertised alongside an unfixed tariff which does not carry the rosette.

According to Joe Malinowski of TheEnergyShop.com, the second product is already £370 a year cheaper than the fixed price 2012 tariff for an average household. "You are certainly getting peace of mind, but you are paying £30 a month for it," Malinowski said.

"We are clearly in a falling market and in a falling market it is generally not a good idea to pay a premium price to protect yourself against rising energy bills. Customers shouldn't be panicked into signing up to deals by advertising."

Source: ' Guardian '

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