More energy price cuts

Published:

13 February 2009

Topic:

News,Gas & Electricity

E.ON and EDF Energy are the latest gas and electricity providers to announce price reductions. With four out of the six major providers now having confirmed lower prices it will soon be time for households to switch their tariffs and maximise the savings on their energy bills.

The decision to pass on these cuts comes on the back of increasing pressure from MPs and consumer groups that Britain's energy providers must reduce the amount they charge customers.

British Gas and Scottish & Southern Energy (SSE) have already announced that customers will benefit from lower bills. British Gas is cutting gas prices by an average of 10% from February 19, while SSE's customers will see their electricity bills fall by an average of 9% and their gas bills fall by 4%. Its new prices take effect at the end of March.

However, last Friday, the other main providers - E.ON, npower, EDF Energy and Scottish Power - had been digging their heels in and warned that price cuts couldn't be guaranteed.

Earlier this week, energy bosses told the Energy and Climate Change Committee that last year's price hikes hadn't reflected the full increase in wholesale prices so they weren't in the position to pass on reductions to customers.

But with British households having seen their bills soar by an average of 35% last year, and wholesale prices having fallen from their peak in recent months, such claims have been met with scepticism.

E.ON and EDF have bowed to the pressure and announced a reduction in electricity prices. And with four of the six main providers having now confirmed price reductions it seems inevitable that EDF, Scottish Power and npower will follow suit in the coming days or weeks.

The nature of the decreases suggests that providers are reducing prices because they feel they have no other choice.

Scott Byrom, a utilities expert at moneysupermarket.com, said: "Although the decreases seen so far are a step in the right direction, energy users have already paid through the nose for their winter energy consumption. But it is becoming increasingly clear the levels of price reduction consumers want to see will not take place in this round of cuts. It's crucial to be aware of how the providers are altering their prices - all three price drops so far have been made in varying degrees; while this cut is just to electricity, British Gas cut gas only and Scottish & Southern reduced prices on both."

The onus is therefore on consumers to make sure they are on the most competitive deal.

Byrom added: "For anyone who has never switched provider and is languishing on a standard tariff, there are savings to be made now by shopping around. Swapping your payment method will also reduce your bills - paying by monthly direct debit offers more competitive rates than settling bills by quarterly cash or cheque. There are definitely savings to be had out there and consumers should be proactive in looking to reduce the cost of their bills."

Related Links

• Read Collette Walsh's article 'Scottish and Southern Cut Energy Prices'
• Watch Clare Francis interview Scott Byrom in our video 'What next for energy prices?'
• Read Scott Byrom's article 'How to save energy and slash fuel bills'
• Compare tariffs from UK gas and electricity providers

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