If you are like many who use gas to cook your food, you may have noticed that your gas bill was higher than usual during the winter. That’s because the price of wholesale gas was very high due to increased demand and supply disruptions.
But the good news is that the wholesale gas price has dropped significantly in the past few weeks to the lowest it’s been in more than 18 months, and this could mean big savings for you if you are on a fixed gas plan. A fixed gas plan is a contract that locks in a certain rate for a period of time, usually one or two years. While this can protect you from price spikes, it can also prevent you from taking advantage of price drops such as NOW!
That’s why you may want to consider switching to a variable gas plan, which allows you to pay the market rate for gas each month. The current variable gas rate is around $2.50 per GJ, while the average fixed rate is more than $5 per GJ. This means that you could potentially cut your gas usage cost in half by switching to a variable plan. You may use our Cost Calculator to have an idea of how much you could potentially save in a month,
Of cause, you may also be thinking what if the market rate goes up after a few months of switching? The good news is that the futures market for gas looks good for consumers at the moment- with future rates remaining less than the current average fixed rate of $5 per GJ, and if the situation changes, you could always switch back to a fixed plan; many energy retailers now allow customers to switch between plans without any penalties.
The chart below shows the historic trend of natural gas prices for fixed and variable and fixed plans.