Simon Moynihan

British Gas increased prices on its Market Tracker tariff this week and every major news outlet covered the story. Many headlines were apocalyptic and spoke of 40% price increases, soaring bills and millions of hard-up Brits facing ruin.

In fact, only 2,500 households will be affected with a 14% price increase. British Gas's Market Tracker follows wholesale prices and is adjusted every three months. If wholesale prices go up, so does the Market Tracker.

When British Gas last increased prices on the Market Tracker in December, there were 5,000 customers on the tariff. Half of those have switched away since and British Gas has withdrawn the tariff from most comparison services. This latest hike should see the few remaining customers looking for another supplier.

It may be difficult to see why an increase in the price of an obscure tariff with hardly any customers should have created such media attention, but before the run of price increases at the beginning of the year, British Gas and their Market Tracker acted like an early warning system for consumers.

In December, British Gas's parent company Centrica made a statement declaring that prices for domestic consumers were unsustainable in light of soaring wholesale prices. Then they increased prices on the Market Tracker and one month later the major energy suppliers began hiking prices for millions of customers culminating in an overall increase of 13% and bringing energy bills back over the £1,000 mark.

Six months later, the same situation has just presented itself. Centrica made a statement in May hinting very strongly that they may have to increase domestic gas and electricity prices to sustain their level of profitability. Last week they increased prices on the Market Tracker. If history is in fact repeating itself, we should see the first of the major energy suppliers announce price increases within weeks.

This leaves consumers with a dilemma. Should they wait out the wave of increases or look for the cheapest deal now? Switching could just mean that they will see a price increase with their new supplier as happened to thousands of customers who switched at the start of the year.

Alternatively, consumers could choose a fixed price tariff which guarantees not to increase prices for a certain period. These are almost always more expensive than standard rates, but they provide security in an increasingly volatile market.

Says Florian Ritzmann of price comparison service Unravelit.com: "We're seeing a much higher number of consumers looking for fixed price tariffs. Scottish Power recently withdrew their fixed deal as they filled it much more quickly than they expected to which shows the level of demand. Probably the best fixed deal on the market is npower's Price Fix 2011. It's currently over 10% more expensive than a standard deal, but it's guaranteed for two and a half years, the longest of any fixed deal."