Oil prices are dropping, so why are bills still high?


Video transcript

Oil prices dropping… why are my bills still high?

Last week, in particular, gas and power prices were very low.

Gas for one day was 35p/th similar to what we were used to

The drop is because Britain is now a major transit point for gas to flow into western Europe and our prices are at a discount to theirs.

The warmer weather in the summer months makes this a low demand time for energy.

We would normally see the filling up of gas storage in preparation for winter.

While short-term gas prices in the UK are currently low, the UK’s lack of gas storage means we cannot capitalise on this in the long term as we simply do not have the capacity to store the cheaper gas.

It would be incredibly expensive to increase our storage to sufficient levels, even when Rough was operational It would have only covered 10 days of winter.

This means over the Winter we will again become dependent on European gas and therefore gas prices are likely to be much higher than we are seeing currently.

The Price Cap, which determines the maximum that a supplier can charge a customer per kwh, is based on long-term prices, and so, the current gas rates will have little to no effect on bills

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