Low night tariff?  Read the post in full and offer your opinion

After reporting price hike after price hike in 2006 I was beginning to think I’d be the most unpopular contributor on Rate Alert, and so it is with huge relief that I can finally be the bearer of good news as both British Gas and Powergen have slashed prices!

As many of you will be aware, a little over a week ago British Gas finally cut prices as a reaction to losing 14% of its client base in the last three years. Though its cuts could have come a LOT sooner (the price of wholesale gas collapsed in the second half of 2006) the move, which will see gas prices fall by 17%, electricity prices fall by 11% for an average total saving of £167/year, is certainly to be welcomed.

However, the reaction from Powergen this week is even more intriguing. It has chosen to target specific regions with significantly higher discounts for its online tariffs. This suggests the company can’t compete with the British Gas cuts across the board, but does present an interesting alternative particularly for those in London who will benefit from a 17% average reduction. Let’s take a look at the cheapest providers, region by region:

How Powergen’s new online prices stack up across the regions (yellow is cheapest tariff):

The move from Powergen could spark a similar reaction from other gas and electricity providers. So should you hold off before changing providers and wait to see how the price war develops? The British Gas increases do not take effect until March 12 and there will surely be more movement in the market before then. However, this is the most expensive time of the year for gas and electricity due to the cold weather and so I would suggest you take a look at the gas and electricity comparison tool and make a judgment call based on the savings you could be making now. They could be so significant that it makes no sense to wait around in the hope of an even better deal. And remember, even if a better deal does come along, the majority of gas and electricity contracts only last for 28 days so there’s nothing to stop you changing providers again. In fact, the more often customers change, the more likely the providers are to continue to cut their prices.

Whether you choose to change now or in a few weeks, make sure you capitalise on the cash back deal at moneysupermarket.com which will give you £30 cash back to all customers swapping to a dual fuel tariff through its service, while those not going for a dual fuel tariff but changing a provider or tariff will benefit from a single £17.50 payment.

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Compare gas and electricity tariffs