Since the start of the year, energy companies have one by one announced that they will be cutting either their gas or electric prices, or both in the next few weeks. But is it as good as it sounds for customers?
The cuts made by the ‘big six’ energy providers range from three to six per cent, but over a year will only save customers on average, around £36. This, however doesn’t even come close to compensating for the 15-20 per cent price hike that energy companies introduced in summer of 2011.
It seems that the £36 annual saving is only a temporary measure for commercial properties and home owners, as Dr Tony Cocker, Chief Executive of E.ON expressed: “Whilst we’re pleased to pass on this recent slight fall in wholesale prices, most experts agree that global energy prices will continue their long-term rise.”
Consumers
Many customers won’t even be aware of the fact that they have had a price cut, as the figure is so unnoticeable. Speaking of the cuts, Ann Robinson, Spokeswoman of energy comparison website, Uswitch, suggested that: “[Commercial properties and] households can save up to £420 by moving to dual fuel, paying by direct debit and signing up to a competitively priced deal – a far bigger saving than that being offered by suppliers lowering their prices.”
“Suppliers are focussing their cuts on one fuel, while previous hikes hit both gas and electricity. The fact is that these cuts will not even come close to wiping out last year’s eye watering price hikes,” Ms Robinson added.
Clare Francis, Site Editor for Moneysupermarket.com agrees with Ms Robinson on this subject: “Customers should weigh up whether they are on the best value deal for the area they live in and for the amount of energy they use. In some cases the fixed deals customers are already on may still be the best option.”
| British Gas | E.On | EDF | Npower | SSE | Scottish Power | |
| January | Elec: -5% |
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| February | Elec: -6% |
Gas: -5% |
Gas: -5% |
Gas: -5% |
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| March | Gas: -4.5% |
Energy prices cuts in 2012
However, Consumer Focus, spokesman, Adam Scorer, hopes this is just the start of the energy price cuts: “Customers will also be keen to see if the supplier will buck the trend and makes deeper cuts or reductions across both gas and electricity given wholesale price falls in both.”
“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,” Mr Scorer added.
We will have to watch this space to see if the cuts are just the start, or with the recent frosty weather, the price cuts could be even more temporary than we thought.
