Beat January's 13% Gas Bill Rise

Gas prices are set to rise 13% after Christmas, and electricity by 17%, too. But, if you act fast, you can lock in today's prices for a year!

It was easily overlooked, but last week British Gas announced it was raising the price of its Market Tracker gas and electricity tariff for the first time since it was introduced in July. The Market Tracker tariff closely follows the ups and downs of the wholesale price (which is what utility companies pay to buy their gas and electricity in bulk). This makes it a bellwether for the prices that we pay as a whole.

In other words, if wholesale energy prices change significantly, then the Market Tracker price is the first to reflect these changes. We need to take notice then, because the gas price has just gone up by 13% and the electricity price by 17%, too. The combined increase is approximately 15%. So, we can expect soon that all suppliers will raise their own prices by a similar margin. The prediction is: brace yourself for big rises.

How to lock in today's energy prices

There is something you can do to lock in today's prices, but only if you act immediately. Florian Ritzmann from Xelector, which powers our gas and electricity comparison tool, alerted me to a competitive tariff called PriceFall (or Price Fix 2008) from Scottish and Southern (the company behind the SouthernPower, ScottishHydro and Swalec brands). Not only is the price good at present, it's guaranteed not to rise before November 2008. Furthermore, if Scottish and Southern reduces its standard prices to below the PriceFall price, then PriceFall will come down in line with it.

Using our tool, I did a few tests by entering different amounts and post codes, and found in every case that the tariff was indeed very competitive, especially if prices for regular tariffs are going to rise in the near future. However, results vary depending on where you live and how much energy you use. Also, although this tariff is widely available, one or two areas might not be able to get it. Therefore, you should consider all your options when you compare prices.

Another fixed tariff is widely available across the country. It's Eon's Fixed 2009 (Eon was Powergen until recently), but in all of my tests this tariff is considerably more expensive than many others, including PriceFall.

When you compare prices, there's also a chance you'll find that the cheapest tariff available for you is much cheaper than PriceFall. If the cheapest costs around 15% less then it's certainly worth considering. However, remember that prices might rise yet higher between now and next November.

The trouble is, with wholesale prices rising, Scottish and Southern are unlikely to leave this tariff on the market for much longer so, if you have a spare fifteen minutes this week to compare prices and switch, it's worth doing.

Compare gas and electricity prices through The Fool, which looks at over 7,000 tariffs, and gives you the tariffs in the correct order of cheapest first.

>>> Since publishing this article this morning, npower has today announced that it will increase its market tracker prices too (from January), and Centrica noted rising gas prices in its trading statement today. These signs are almost conclusive support for the prediction that gas prices will shortly rise across the board.