February 11, 2016
The last of the "Big Six" Energy Suppliers have now announced prices cuts for customers on their standard tariff gas customers.
British Gas revealed a 5.1% price reduction, followed almost instantly by EDF's announcement of a 5% cut.
British Gas's price change takes effect on the 16th of March, while EDF's kicks in eight days later. Good news to the 6.8 million British Gas and 900,000 EDF customers currently on their supplier's standard tariff, but they could still save considerably more by switching to a fixed price tariff.
At the beginning of the year pressure was mounted on the "Big Six" from politicians, the energy regulator and charities to bring the cost of energy down in line with falling wholesale costs. E.ON quickly announced a cut of 5.1% on the back of the negative publicity, followed by similar reductions by SSE, Scottish Power and Npower. Wholesale costs for gas have dropped more than 57% since 2014.
Executive director at consumer group Which?, Richard Lloyd, said:
"Seeing all of the big suppliers mirror each other with small cuts in the face of falling wholesale prices will raise questions in many people's minds about whether competition is working in this market."
Wholesale costs of electricity has also dropped more than 30% since 2014 but this hasn't been reflected in any price reductions. This has led to more criticism of the energy industry.
Energy analysts at Jefferies said:
"There has still been no movement in electricity tariffs, despite a 30% fall in wholesale electricity prices since August 2014. This is likely due to increased environmental costs, which fall on electricity rather than gas, and additional network charges."
Any customers on a standard tariff, with any supplier, will be paying more than they need to be for their energy and would benefit from being on fixed term tariff.
Rachel Fletcher, OFGEM's Senior Partner for Consumers and Competition, said:
"These price cuts are a movement in the right direction for loyal customers, but they are dwarfed by the savings available by switching from a standard tariff to a fixed deal. You could save more money, up to £300, by switching."
You can see exactly how much you could be saving by doing a simple comparison on our free and impartial energy calculator. Enter a few details and we take care of the switch for you. Click here to be taken to our switching tool.
Posted on February 11, 2016 at 03:23 PM