Energy market 3 May 2022 • 4 minutes
The news broke on 30 September: in view of the unprecedented rise in energy prices, some suppliers have decided to temporarily withdraw their fixed price contracts – in order to help Belgian consumers, but there’s more to it than that… We take a look at the initiative.
It’s been headline news in much of the Belgian media since the summer: electricity and gas prices are rising. And unfortunately, the situation is unlikely to be sorted out in the weeks ahead. In August 2021, the CREG (the Commission for Electricity and Gas Regulation) was already saying that, for variable price contracts, annual electricity bills had increased by €70 between 2020 and 2021 and gas bills had risen by €111 over the same period.
Why have prices risen so much? The inflation can be explained by several factors:
Energy prices are forecast to rise further in the coming weeks, especially in October and November. The electricity price paid by suppliers may rise to as much as €207 per MWh, while that of gas may rise to €94 per MWh, representing an inflation rate of 7%.
Faced with this dizzying increase, some small suppliers such as the cooperative Cociter, Belgian supplier Octa+ and Liège-based supplier Mega have decided to suspend their fixed price deals, following the example of TotalEnergiesin September, which temporarily withdrew its three-year fixed price contract, TOP.
Vincent Declerck, commercial director at Octa +, justifies this decision by explaining that instalment payments are partly calculated on the basis of current prices. With the situation at the moment, this would mean that consumers would be expected to pay monthly bills three times higher than the usual average.
But the decision to suspend fixed contracts wasn’t only made to help consumers. Should prices fall in the coming months, customers will be free to jump ship whenever they like, without any early termination fee and with just one month’s notice. Understandably, therefore, suppliers also want to protect themselves by avoiding the loss of potential loyal customers. On the other hand, they also fear ending up with excess energy that has been purchased at an elevated price.
As a price-conscious consumer, you must first and foremost remain vigilant and find out all you can about the energy price curve before making any decision about your contract. If you took out a contract in 2020, at a time when prices were at a historic low, we advise you to keep it until it expires.
However, if your contract is about to end, the best thing to do is to compare prices. You can use various tools to help you do this such as the CREG Scan, which shows you whether your contract is suited to the current market and if it isn’t directs you to the one that fits your consumption pattern best.
You can also use our comparison tool and/or phone our call centre free of charge on 0800 37 369, on Monday to Friday from 9 am to 6 pm, to receive personalised advice and be directed towards the best contract.
Finally, you can opt for a group buying solution. This collective approach uses the strength of a group and can put excellent reductions within your reach.