Does Luminus’ decision come as a surprise to you?
“It is a quick comeback from the permanent contract, yes. (Only three months ago, Luminus was the last Belgian energy supplier to say goodbye to its permanent contracts, JVH) But it is very clear that there is a commercial logic behind this: the hope that being ‘the first to jump’ gives you an advantage over your competition.”
What do you think, will we see an increase in these permanent contracts?
“We know that consumers really like certainty. A permanent contract is clear. Clear. It gives you – for a certain additional cost – a certain mental peace. Many people find a variable contract a lot of hassle. To know your bill, you have to keep an eye on the energy market. Annoying. The best evidence for this statement is the pre-crisis situation. At that time, two thirds of the people had a permanent contract.”
Would consumers do a good thing by switching?
“That is impossible to say today, for the simple reason that Luminus has not announced any prices yet. Then it is difficult to give advice. (laughs) As soon as the prices are known, as a consumer you have to look at two things: how much is the premium, what extra do you pay for security? And what energy prices are settled?”
It is possible that you pay much more than necessary?
“It all depends on the ‘fine print’. For example, what regarding the length of the permanent contracts? Is it the traditional formulas of one, two and three years? Or is it regarding three months? In that case you are not far from a kind of variable contract. And then it may become less interesting financially. The best advice I can give is: always compare well using all the online tools out there.”
Now that energy prices are falling, it might be better to wait a while with a permanent contract?
“Which can. Anyway, we know that energy prices will remain volatile in the coming years. This energy crisis is not over yet. Our dependence on Russian gas in Europe was far too great for that. For now it is still manageable (The International Energy Agency sees a shortfall of 27 billion cubic meters of gas for the winter of 2023-2024, JVH).”
Could energy prices rise once more in the near future?
“Prices are currently falling due to the very warm winter weather in Europe. If it freezes once more in the following weeks, prices will also rise once more. And if we have to refill our gas supplies for the winter of 2023 in the spring and summer, there is also a good chance. We will certainly be on a roller coaster for another two or three years. Again: the structural problem behind this energy crisis has not yet been solved. Its a shame, but there is nothing to do regarding it.”
That all sounds rather ominous. This crisis will really last that long?
“Well, only the gods can predict. It is also possible that the war in Ukraine will soon come to an end, that our energy relationship with Russia will be restored and that prices will plunge to the levels we have known for years (still up to four times lower than today, JVH). Who knows. Although I don’t count on it right away.”
So maybe consider that permanent contract? What would you do yourself?
(Thinks) “I would dare to consider it if the prices of the fixed contracts do not differ too much from those of the variable contracts. Suppose, for example, that you have to pay an extra 50 euros per month, then it might be worth it. Certainty in very uncertain times, that is important. I think a lot of people will be attracted to that.”
