Most energy suppliers will now offer to supply you with both gas and electricity. In order to hook you into dealing with a single supplier for both fuels, you will be offered discounts for taking out a ‘dual fuel’ tariff. These are becoming increasingly common ways to buy energy and can cut down on the admin of dealing with separate suppliers for each fuel.
What is dual fuel?
Dual fuel aims to simplify your contract with the supplier by bundling both gas and electricity together. With this type of deal you will make one payment for both fuels, which will be taken monthly or quarterly. You will still see separate bills which will show your energy usage for gas and electricity. This also helps to make your quotes simpler to understand and makes planning your finances easier.
It is easy to see why using one supplier for both fuels and picking up a discount should be a no-brainer. Why wouldn’t you want to pay less for less hassle? But are these deals always cheaper?
Will a dual fuel deal always be cheaper?
As you probably expect, it is not always cheaper. Most of the discounts offered will be incredibly small and do not always match up to single fuel tariffs of competitors. When comparing deals it is important to make sure that you are comparing every possible combination of tariffs. This is the only way to guarantee that you are getting the best deal.
What are the advantages of using the same supplier?
For any given energy supplier that offers a dual fuel deal, it will be their best. This may not make it the best on the market but with a discount offered, will beat the combined individual tariffs of that supplier.
These cheapest fixed deals will run over a period of 12 or 24 months. Meaning you will be able to financially plan ahead for that period. Unless you use much more or less energy, your annual usage estimates will be an accurate indication of your annual bill.
With only one supplier to deal with you will have only one supplier to pay. On top of that, you will know exactly when your deal for both gas and electricity ends.
If you opt for a smart meter, you will only need one. Usually, your gas meter communicates with your electricity meter which sends all data to your supplier. If you have separate suppliers you will need a smart meter for each, so that they can talk to your two independent suppliers.
What are the disadvantages of using the same supplier?
There may be cheaper deals available. By comparing deals, it can become clear that dual fuel deals are not always the cheapest option. Your chosen supplier may have the best available rates for gas, but better tariffs could be available for electricity. Although it can be more hassle, using separate suppliers for gas and electricity can sometimes save you money.
Assuming you have opted to be a dual fuel customer, you will be tied to a fixed term. This means that even if the market changes and prices drop, you will not be able to take advantage. The fact that you are tied into both fuels means that you will be losing out twice over in this scenario.
What differences will there be if I use two providers?
You will need two smart meters as mentioned above.
Your energy bill management will be more complex. You now need to talk to two suppliers. This means two direct debits, two lots of bills and two customer service desks. There is an increased chance that your deals will end at different times. In this case you will need to organise switches at different points, instead of all at once.
You may find that the best tariff for gas is not offered by the same provider that offers the best tariff for electricity. If this is the case then you could save money by dealing with separate providers instead of bundling both into one package.
What this shows is that there is no right or wrong way to choose your tariff. This year the best possible deal for your home may be a dual fuel tariff. Next year that could all change and using two providers might offer the biggest savings. When the time comes to switch the best thing to do is compare deals across the market. Then, take time to read through the deal and research the top results to find the best fit for you and your needs.