Three remaining major energy companies cut gas prices

Scottish Power, E.On and Npower have now joined the other three major energy suppliers in the UK in announcing a cut to their energy tariffs.

Scottish Power have announced a 5% price cut in their gas prices. They expect to cut bills by an average of £36 per year for their customers.

NPower have confirmed that their cut in gas prices will be 5% and they expect this to save their customers an average of £39 per year.

E.On have not cut their gas prices, but instead have cut their electricity prices by 6%. They estimate that this will help to save their customers an average of £31 per year.

However, the majority of the major energy suppliers warn that energy prices will rise again in the future.

The energy companies have suggested that the mild winter has seen many people reduce the amount of energy that they use and this has led to a fall in the wholesale price of gas. However, they also indicate that the long term trend for wholesale energy prices is an overall increase.

British Gas and E.On controversially cutting their electricity prices rather than their gas prices has made them the only major energy suppliers to leave their gas prices untouched.

The choice to reduce energy prices has met some criticism from many people. The cost of gas tends to outweigh electricity, so reducing the electricity price doesn’t save as much money for consumers. Some critics also suggest that reducing electricity prices will not cost E.On and British Gas as much money as reducing their gas prices would.

However, it remains to be seen if this decision will impact on any future rises in gas prices by these two suppliers.
A spokesperson for the price comparison site, Uswitch, indicated that these price cuts do not come close to the price rises that consumers have had to cope with over the last year.

From November 2010, customers faced two sets of price rises, ranging between 20% and 28% rises in gas prices, and between 11% and 22% for electricity. At most, these cuts will benefit consumers by 5% in gas price or 6% in electricity price.

Adam Scorer from Consumer Focus welcomed the price cuts, but warned that the energy suppliers have a long way to go before regaining consumer trust.

Mr Scorer said: “We hope this shows suppliers are waking up to the need for customers to see rapid cuts when wholesale prices are low and that this trend will continue if wholesale costs carry on falling. But customers will still be paying a lot more for their energy than they were a year ago and there will still be almost seven million households in fuel poverty.”

Citizens’ Advice have now launched and Energy Week which they hope will help people to make savings on their energy bills. Their advisers are providing tips and advice to help people reduce the costs of heating and powering their home.