E.ON announces surprise gas cut

Published:

06 July 2009

Topic:

News,Gas & Electricity

E.ON has reduced its standard gas prices by 3.3% which will save customers an average of £25 a year.

The decision by E.ON to reduce its gas prices follows a 9% cut in electricity costs it implemented in March. However, these prices reductions aren't enough to offset the last year's increases.

Scott Byrom, utilities expert at moneysupermarket.com said: "This price drop is a tiny step in the right direction. While it is a welcome surprise, a 3.3% drop - that's just £25 for most customers - isn't earth-shattering, especially following the record energy price hikes of last year."

The decision to reduce its gas costs now came as a surprise but analysts hope it could prompt other providers to follow suit.

Byrom added: "It will hopefully encourage more competition in the market and mean other providers will also reduce their prices."

Energy providers have been under pressure to cut prices following last year's record hikes, when gas prices rose by an average of 47% and electricity bills went up by 28%.

Just last month, Consumer Focus reported that energy customers are being overcharged by providers to the tune of £1.66bn this year, working out at around £74 per household.

Philip Cullum, deputy chief executive of the watchdog, claimed its new research showed the big six suppliers have failed to pass on the full cuts in wholesale energy prices.

He said: "Energy firms should take immediate action to put things right for their customers. A failure to act, and to ensure that people pay a fair price for energy, could have serious consequences for the sector."

In the meantime, many households could slash their annual gas and electricity bills by switching to a more competitive deal - the average saving is £174 a year.

Byrom said: "For anyone who has never swapped provider and is languishing on a standard tariff, there are savings to be made now by shopping around for the best tariff to suit you.

"Swapping your payment method will reduce your bills too - paying by monthly direct debit will offer more competitive rates than settling bills by quarterly cash or cheque."

Online deals are the cheapest with British Gas' Websaver 3 offering best value to the average household. Our gas and electricity comparison tool enables you to identify the best deal for your circumstances. For more information about how to switch energy provider watch our videos 'Get the best energy deal' and 'How to switch energy provider'.

Related Links

• Compare tariffs from gas and electricity providers

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