Product analysis: New energy tariffs from Sainsbury’s Energy
Sainsbury’s Energy launched two new tariffs: The Fixed Price February 2016 and the Price Freeze February 2016. These offer fixed prices until the end of February 2016. The Sainsbury’s Energy Fixed Price February 2016 tariff will cost the average household £922 a year.
“We’ve been watching the significant moves in the international energy market extremely closely for some time, with the aim of helping customers with a price cut at the earliest possible opportunity,” Iain Conn, chief executive of British Gas’ parent company Centrica, said.
“We bear the responsibility of managing the risks of buying energy ahead on behalf of our customers, who value the predictability this brings. Taking this decision now, at a time of continuing uncertainty, shows our absolute commitment to pricing competitively, with customers at the forefront of our minds.”
Controversy has abounded within the consumer energy sector during the initial weeks of this year, with the Big Six all moving to offer reductions on their gas prices to customers. However, rather than delivering welcome relief, the development has provoked criticism and outcry; the rates of reduction do not reflect the true reduction in international gas prices over the course of last year, and the majority of discounts do not take effect until later in the year.
Against this backdrop, Sainsbury’s move to undercut the competition is sure to be well-received – the Fixed Price tariff is only £9 a year dearer than the current market leading tariff (Fresh Fixed Price January 2016 v10) from Extra Energy. Sainsbury’s is now an attractive competitor in the sector; “these new tariffs demonstrate why customers must look beyond the Big Six to get the best energy deals”, Jeremy Cryer, energy spokesperson at Gocompare.com said.
It is also worth noting that customers who buy their gas from Sainsbury’s will pay 20 per cent less than British Gas customers on a similar deal – despite the supermarket sourcing its supplies from British Gas.
There’s a £30 per fuel cancellation penalty if you leave the Sainsbury’s tariff before the contract ends, but this is fairly standard in industry terms.