More power firms cut energy prices
Energy companies British Gas and SSE both cut prices in the wake of EDF’s move on Wednesday – but consumer groups say the cuts still go “nowhere near” cancelling out earlier price hikes.
The price cuts will bring relief to cash-strapped consumers, the energy giants say.
British Gas has cut electricity bills for more than five million people with an average five per cent drop in its standard energy tariff. The price cut will take effect immediately, and will snip around £24 from the average bill. The company is not reducing gas prices.
SSE, the owner of Southern Electric and Swalec, has cut the price of household gas by 4.5 per cent from 26 March, shaving £28 off the average gas bill for up to 3.5m households. It has alsosaid its commitment to cap household gas and electricity prices will be extended by two months to October 2012, and pledged to look at more cuts if possible. Customers of M&S Energy, which is supplied by SSE, will also benefit from the reductions.
The moves follow EDF’s announcement on Wednesday that it would drop gas prices by 5 per cent – and other operators are set to follow suit.
However, campaign groups say that the cuts are a drop in the ocean compared to the steep energy price rises seen in recent years. For example, British Gas – owned by Centrica – increased gas bills by 18 per cent and electricity by 16 per cent in August.
The bottom line for consumers is that these cuts will go nowhere near cancelling out the 21 per cent hike in prices they’ve seen. Anne Robinson, uSwitch
It wasn’t the only one – all of the “big six” energy suppliers upped their tariffs last winter, and again in summer. SSE increased household gas prices by 18 per cent and electricity by 11 per cent in September.
However, recent reductions in wholesale energy prices have led suppliers to reverse the price rises.
Ian Peters, managing director of British Gas, said: “Household budgets are stretched and we are doing everything we can to help our customers keep their bills down.”
‘Not enough’
But Anne Robinson, director of consumer policy at uSwitch, said the price changes did not go far enough.
“The bottom line for consumers is that these cuts will go nowhere near cancelling out the 21 per cent hike in prices they’ve seen in the last 18 months. We can only hope these reductions are the first and more will follow.”
Mark Todd, director of the independent price comparison service Energyhelpline, added: “We believe there is room for price cuts of up to 10 per cent because of the recent dramatic falls in wholesale prices but clearly the major suppliers do not feel they have the necessary leeway to go much further than 5 per cent.
“This may be because they are worried about their profits but also because they genuinely think that wholesale prices could go back up and that investment in green energies is limiting their room for manoeuvre.”