Martin Lewis: Heating oil LPG price hikes – are firms playing fair? We need your feedback

Just got off the phone after Secretary of State for Energy Security and Net Zero, Ed Miliband called to discuss in detail the problems people are facing with domestic energy bills and heating oil. Here's what I fed through – your feedback would be useful...

1. HEATING OIL (and LPG): This is the most immediate concern as many, often in rural areas or Northern Ireland, are refuelling their tanks. Prices have rocketed, a few even suggest they've nearly doubled in a week. My biggest concerns are...
   
   a) those who can't afford the new price;
   b) lack of specific regulation as heating oil isn't covered by Ofgem (though that's a longer-term issue);
   c) some have anecdotally reported existing booked-in orders being cancelled, and being asked to rebook at much higher prices. I want to firm up whether this is widespread...
   
   I'd like to hear specific examples of how much prices are rising, especially of point c), and will pass them through to the Department for Energy Security and Net Zero.
   
   2. CONSUMER GAS and ELECTRICITY BILLS: This is less imminent, but a potential ticking cost time-bomb. I'm focused on the English, Scottish and Welsh system here...
   
   - In the short term: most bills are protected from the spike in wholesale energy prices as the Energy Price Cap is set based on a significant time-lag. In fact, it is locked in to DROP 6.7% in April.
   
   Those not on the Price Cap are mainly on existing fixes (which, due to unprecedented prior policy changes, will see most suppliers cut existing fixed rates on 1 April, typically by 7% to 9%) so are also price protected for now.
   
   One current concern is the lack of availability of cheap fixes. While that's frustrating, in the short term it means those whose existing fixes are ending, will just (hopefully temporarily) need to move on to the Price Cap.
   
   There are also a minority of homes who are immediately affected, eg, those on time-of-use tariffs. These include Octopus Agile & Tracker, which move half-hourly or daily with wholesale rates.
   
   These are sophisticated user tariffs, and, if necessary, people have the short term option to switch back to a Price Cap tariff (though do check for restrictions on how long before you can switch back).
   
   So while none of that is great, it isn't crisis point.
   
   - The end of May is likely crunch time: this is usually when the next Price Cap (July to Sept) is announced. It currently seems very likely it will rise, though just how much all depends on how long-lived the current energy price spike is.
   
   Yet the key is whether wholesale rates have dropped back down or not by that point. If they have, while the Price Cap rise will annoy many, it won't be critical for most for two reasons:
   
   i) the July to Sept Price Cap is usually the lowest use period. So, even if typical use rose £200 a year, in practice, this'd just be, at a guess, an extra £30 to £40 paid over the period. If by then wholesale rates are down, a substantial cut would be expected for the next (Oct) Cap.
   
   ii) the rate new fixes are set at is based on wholesale rates, so if wholesale rates have dropped by then, the big push should be to get people off the Price Cap and onto fixes which could possibly look to be 20%+ cheaper, avoiding any price hike. That should then leave only those unwilling or unable to switch paying more - the latter is an issue the Government would need to concern itself with at that point.
   
   Yet if rates haven't dropped back down by May, and it looks like it'll stay high – so the October Price Cap will rise too, and no cheap fixes are available – then things get into real problem territory. The Government needs to be (and I suspect is starting to) planning now for that eventuality in case more hard-core intervention is needed.