Sunday, 24 January 2016

Tariffs cut are welcome, but more needs to be done

Tariff cuts are welcome but more needs to be done

Leading online price comparison service The Energy Advice Line has welcomed plans by energy giant E.ON to cut gas prices by 5.1%.

The move follows a request to all energy firms from Energy Secretary Amber Rudd last year to pass on a fall in wholesale gas prices to consumers.

Julian Morgan, managing director of The Energy Advice Line, said E.ON's move was a step in the right direction, although consumers were unlikely to be impressed with the size od the cut.

"The announcement will knock around £30 off the average annual gas bill, which is obviously welcome news for consumers," Mr Morgan said.

"But the fall in E.ON's wholesale costs roughly translates to a 10% cut in a dual fuel domestic bill - around £120 a year.

"Consumers are unlikely to be won over by E.ON's argument that the announced cut is not that big because it has to manage 'other risks in the market'."

E.ON is the first of the Big Six suppliers to announce a price cut this year, and analysts expect the remaining five - British Gas, SSE, npower, EDF and Scottish Power - to follow suit.

E.ON's announcement takes effect on February 1 and follows intense pressure by politicians, OFgem and consumer groups to pass on steep falls in wholesale prices triggered by Britain's mild winter and low commodity prices.

Wholesale gas prices fell by 34% in 2015, according to the ICIS Power Index, while electricity prices were down 23% - a five year low.

"I call on the remaining Big Six suppliers to do the right thing and announce a meaningful reduction in energy tariffs, both for householders and business energy users." Mr Morgan said.

"Suppliers have barely reduced their prices over the period that wholesale costs have been falling. Most of their standard variable rates remain hudreds of pounds a year more expensive than the best deals in the market."

Mr Morgan said the only way for consumers to make significant saving on their energy bills was to shop around and switch supplier.

The Energy Advice Line is one of the UK's leading price comparison and switching services for business and domestic energy customers. It is also and advocate for energy market reform and has campaigned for a better deal for energy users, including calling for a ban on cold calling and changes to regulations to make it easier for all consumers to switch suppliers.

The service is completely independent and free. Consumers can quickly and simply search the marketing for the best available energy deals from an extensive panel of small and large energy suppliers. The service also offers a free advice line for business energy customers.

For further information visit energyadviceline.org.uk