Will the price of Electricity and Gas come down in 2023?

Wholesale Gas prices are now lower than they were before the invasion of Ukraine, how long / will this be reflected in consumer bills, on both the Gas… but more importantly Electricity.

It looks like the UK and most of Europe has found ways to stabilise themselves from the price hikes of Russian Gas pre shut off, as well as life post. This mainly being in the form of topping up Liquified Natural Gas stores from the USA, Qatar and Peru to give a buffer if it gets colder, but also for Winter 2023/24. This has been helped by a relatively mild deep winter, and a wider awareness from businesses and general public to be more responsible when it comes to efficient practices.

Another seasonal boon has been the above average wind speeds, which has also eased the burden on gas as a power generation source. Another factor helping the UK which I’ve come across is now France is back from Christmas holiday season, their 12 nuclear reactors are back up to peak efficiency creating an energy surplus, which the UK can buy in electricity rather than burn more gas, which tops up the Hydro-electricity we buy off Norway as well.

We know suppliers buy their energy in advance, roughly three to six months sensibly to insulate from market volatility. With wholesale prices being lower than February 2022, it would be nice to see the market naturally correct and supercede the Governments Price-cap which is due to be revised again in April going up by a further 20%.

Not only would that be a massive saving for taxpayers long term, and businesses nationwide, but would put electric fuel savings back as the key driver in switching to a Battery Electric Vehicle, rather than tax incentives.

So here’s the question to those in the know… How long will it take for these lower wholesale prices to trickle down to the consumer? Hopefully quicker than Banks passing on interest savings, but are we looking at next quarter, next year or somewhere in-between?

Fuelling an EV is still about half of the price of a typical petrol equivalent, but if the domestic electricity rate can come back down to 28p per kWh then the fuel savings are around a third that of petrol! Try our fleet savings calculator here if you want to see how that could look for your fleet.