This April 1st, it’s not a fish: energy prices will drop impressively.
This is particularly true for the many Belgians who have taken out a variable quarterly contract, these contracts that Engie in particular automatically offered to its customers when the prices were so high that they no longer wanted to grant a fixed contract. This is the “Easy variable” type at Engie or Eneco variable, for example.
According to the tariff formulas in force, and the prices on the wholesale market observed in March, we should thus go for an Easy contract from a tariff of 14 cents for a kilowatt hour of gas in March to 6 cents for the next quarter. Minus 60%.
And for electricity, we should go downright from 44 cents to 16 cents per kilowatt hour, or almost three times less.
The advice of Olivier Desclée, the spokesperson for Engie, is also from Monday (by the time the system has registered the new prices) to go and encode your indexes online, and see if you can lower your down payment.
How to explain this sharp drop?
There are several reasons :
- Since the peak at the end of August, the wholesale price has barely stopped falling.
- For a quarterly contract, by definition, the rate only changes every three months. (For those who had a monthly contract, for example, there is also a reduction, but which is more of the order of 20%. Why? Because the prices of these contracts had already fallen considerably in the previous months).
- During the last indexation, in January, the decline had not been very strong because wholesale prices had just risen in December, due to the high consumption that month, and the problems of the French nuclear fleet. But this time, that’s it, consumer prices follow wholesale prices, and we’re back to prices that were those of October 2021, well before the war in Ukraine, for example.
Is this the end of the crisis? Back to normal?
It’s back to some normal. We have returned to pre-war prices in Ukraine but we remain at more than double the prices of 2020. It must be remembered that prices had already risen before the war, with the Russian threats on Nordstream, and fears over the gas supply.
We can nevertheless see that the suppliers seem to have confidence in the evolution of these prices, since after Luminus, it is Engie and Mega who will now be offering fixed contracts again.
If prices are falling, is it really worth taking out a fixed contract?
It all depends on your temperament. In the immediate future, it is clear that the price of the fixed will in any case be a little higher than that of the variable. We pay for the risk taken by the supplier by committing like that for a year.
And for the rest, it’s simple: if prices continue to fall, a variable will be much more interesting. But if they end up going up, a fix protects you from increases, as we saw last year. So, if you need security or to make sure you don’t exceed a certain budget, it can be interesting.
The trend for several months has been downward but right now they seem to be stabilizing a bit. We are still more than double the prices of 2020, but there is little chance that we will return to these prices for a simple reason: at the time, all our gas arrived by pipeline.
Today, to ensure our supply, and this is what has made it possible to lower prices, we have had recourse to new suppliers, who have delivered LNG, liquid gas.