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Exactly. OFGEM sets the max price that suppliers can charge for a variable tariff (sometimes called SVT). Currently this is £500-£700 below the level that a supplier would need to charge to break even, hence why a number of firms have gone under as they are unable (due to OFGEM) to pass the rising commodity cost into their customers.
My concern is that if variable is cheaper than the 12m fixed they are offering (albeit at 2x current rate), it suggests they are expecting prices to go up not down? Or is variable capped by ofgem, so artificially low vs wholesale costs?