Luminus to reintroduce fixed-rate energy contracts

Luminus to reintroduce fixed-rate energy contracts
Credit: Belga

Major energy supplier Luminus has announced that it will reintroduce fixed-rate energy contracts for its customers from 2 January, barely three months after the company became the last energy supplier in Belgium to switch to offering exclusively variable-rate deals.

In an interview with RTBF, Luminus spokesman Nico De Bie noted that the company's decision was precipitated by stabilising energy prices and continuous high demand for fixed-rate contracts.

"50 to 60% of our customers prefer a fixed-rate contract," De Bie said. "Now that energy prices have dropped, we can once again meet that high demand. We have continuously monitored the situation to see when we can offer those fixed-rate deals again. We think now is the time."

Earlier this year, energy suppliers across Belgium switched to solely offering variable-rate energy contracts following the enormous price fluctuations for oil and gas catalysed by Russia's full-scale invasion of Ukraine earlier this year.

On Thursday, European gas prices fell to €77 per megawatt hour: lower than they were before Russia's invasion in February.

Worth the risk?

Despite the high demand for fixed-rate contracts, some energy analysts urged customers to remain cautious about abandoning their current variable-rate deals.

"If prices were to fall sharply in the coming months, such a fixed-rate contract could well end up being expensive," warned Leen Vandezande, a spokeswoman for the Flemish Regulator of the Electricity and Gas Market (VREG).

However, other major energy suppliers — including Engie and Eneco — have so far held back from offering fixed-rate deals. This has led some consumer protection groups to suggest that the financial risk is primarily carried by Luminus rather than its customers.

"Luminus is taking a gamble here," Laura Clays of Test Purchase (Test Achat), a consumer protection group, told Het Nieuwsblad. "If everyone really assumed that the price would go down, there would already be more suppliers offering such a deal."

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Yet Clays conceded that those who opt for Luminus' new fixed-rate offer could potentially end up paying more than those on variable-rate contracts, but argued that this might be compensated by the increased security of a fixed-rate deal.

"Many consumers want to pay a higher amount when there is security and peace of mind," she said. "The variable contracts may be more [financially] advantageous, but they also cause uncertainty."

Luminus has noted that the full details of its fixed-rate offer will be published on Monday. It also cautioned that those who ultimately sign up for its fixed-rate deal will have to wait "at least" thirty days for the energy to be delivered, and potentially up to ninety days.

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