Energy prices are falling, both for gas and electricity. Is it now the time to change your energy supply contract? This is the question posed earlier this week in our consumer affairs programme ‘De Inspecteur’. Kurt Hernot of the federal energy regulator CREG was on hand to answers this and other questions raised by the current state of the energy market.
As gas prices continue to fall is it now the time to review your energy contract?
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Kurt Hernot said that "There is a good chance that you are currently paying too much. Especially if you concluded a fixed-price gas contract between July and December 2022. If you have a variable contract, do not switch to a fixed rate."
But how “low” are current gas prices?
Both fixed and variable rate contract gas prices have been falling for some time now and this is good news. "We see that the downward trend that has been on-going for a while now is continuing. In June prices have fallen by 10% percent. We are moving in the right direction again and the situation is becoming much more bearable for the consumer,” Kurt Hernot told the VRT.
Nevertheless, “Prices are still higher than before the energy crisis". But what should we do? "This depends on the type of contract you currently have".
What should you do if you currently have a variable price gas supply contract?
“Certainly do not look for a fixed-rate contract,” advises Kurt Hernot. “Thanks to having a variable rate contact you will automatically benefit from falls in price and that's a good thing."
Nevertheless, it is worth shopping around to find a variable rate contract with the best conditions. "As there are still big price differences. Some variable rate contracts are more expensive as you are offered additional services. You should ask yourself whether you want to pay extra for, for example, the maintenance of your gas boiler”.
Often it is not even necessary to change energy supplier. "Even with the same supplier you often have the choice between different variable price contracts. Adjusting your contract does not necessarily mean that you have to change supplier," Kurt Hernot said.
What if you have a fixed rate gas contract?
If you have a fixed rate gas supply contract, it is best to check first when the contact was concluded.
"Did you sign the contract between July and December 2022? If this is the case you will be paying way too much. Hardly any fixed rate contracts were offered during this period and gas prices were extremely high." Both variable and fixed rate contracts are currently cheaper. So be sure to compare your options.
“If you signed up between April 2022 and July 2022, you are in something of a gray area. It was then that prices started to rise. So be sure to check the rate stated in your contract and compare it with the current gas prices.”
Many customers signed a fixed rate contract before energy prices skyrocketed last year. "If you signed a fixed rate contract between the beginning of 2021 and the first months of 2022 should definitely not change, because there is a very good chance that you are getting your gas at a good price”.
When is the best time to sign a fixed price contract?
The period from April to July used to the best time to consider switching to a fixed rate contract. However, Kurt Hernot says "This is currently no longer the case. We cannot possibly predict prices evolutions."
The whole energy sector has become even more unpredictable. "This is partly due to the increased importance of renewable energy sources. If there is a lot of sun and wind this summer, electricity prices could fall further because this is simply a cheap way to generate energy."
Nevertheless, many customers still prefer to opt for a fixed rate contact. “Not everyone likes the uncertainty of a variable rate contract. They are therefore willing to pay a little more for peace of mind,” Kurt Hernot told the VRT .
Group purchase: an interesting option?
The consumers’ association Test Aankoop has teamed up with the energy supply Mega for a group purchase contract. But is this worth considering? “It is certainly a competitive contract with a very interesting discount. But be aware that this contract works with a cashback system. This means that you must remain a customer for a full year to benefit from the discount.” Kurt Hernot explained.