British Gas raised hopes of an energy price war yesterday after slashing the price of its electricity tariffs by 10 per cent, benefiting 4.5 million customers.
The company, owned by Centrica, said that the cuts would take effect immediately and would save the typical electricity customer £43 annually.
British Gas is the last of the “big six” gas and electricity suppliers, which include E.ON, EDF, ScottishPower, Scottish and Southern Energy and RWE npower, to cut electricity prices in the latest round of reductions.
However, it has made the biggest cut so far this year and means that prices charged by British Gas are among the cheapest, raising hopes that rivals – which last cut electricity prices in February and March – may respond with further reductions.
British Gas itself cut gas prices by 10 per cent in February, the first of the six to start passing on the reduction in wholesale gas prices but at the time held back from cutting electricity bills.
Phil Bentley, managing director of British Gas, defended the decision, saying: “Electricity is much more evenly spread through the year – everyone’s got their computers and TVs on – and that’s not the case with gas. With gas, we cut in winter and we were the only company that did that. We’ve always said we’ll do what we can when we can.”
He said that the average annual bill for a dual fuel customer was now £1,127, down £132 on the start of the year, making British Gas the cheapest in the UK for customers paying by monthly direct debit. Mr Bentley said the recent fall in wholesale electricity prices had enabled it to reduce tariffs.
However, the Consumer Focus watchdog insisted that the move should have been made earlier. Robert Hammond, its energy expert, said: “This is a very disappointing announcement for consumers, particularly as it is likely to set the tone for the level of energy price cuts across the board. We would have expected much bigger reductions considering that wholesale gas and electricity prices are half what they were at their peak last year.
“This again raises the question of whether wholesale price cuts are being fairly passed on. To answer customers’ questions over whether they are getting a fair deal, Ofgem must commit to a date for its long-awaited review of the wholesale market.”
Mr Hammond said that recent price cuts had lifted as many as 160,000 homes out of “fuel poverty” – whereby more than 10 per cent of income is spent on energy – but that at least as many will have been pushed to that level by growing unemployment.
However, Mark Todd, director at Energyhelpline, the switching advisory service, said: “At last we have a decent double-digit price cut after the tiny reductions announced by many suppliers. British Gas now has the cheapest standard tariff for dual-fuel customers. Other suppliers will hate this and we expect them to retaliate soon with price cuts of their own.”
Mike O’Brien, Energy and Climate Change Minister, said: “It is important to see energy companies passing on wholesale price cuts to their customers. We will continue to press for this as far and as fast as possible.”
Meanwhile, Wulf Bernotat, the chief executive of E.ON, has announced that he will step down next year after running the company, Germany’s biggest utility, since 2003.
British Gas is the last of the “big six” gas and electricity suppliers, which include E.ON, EDF, ScottishPower, Scottish and Southern Energy and RWE npower, to cut electricity prices in the latest round of reductions.
However, it has made the biggest cut so far this year and means that prices charged by British Gas are among the cheapest, raising hopes that rivals – which last cut electricity prices in February and March – may respond with further reductions.
British Gas itself cut gas prices by 10 per cent in February, the first of the six to start passing on the reduction in wholesale gas prices but at the time held back from cutting electricity bills.
Phil Bentley, managing director of British Gas, defended the decision, saying: “Electricity is much more evenly spread through the year – everyone’s got their computers and TVs on – and that’s not the case with gas. With gas, we cut in winter and we were the only company that did that. We’ve always said we’ll do what we can when we can.”
He said that the average annual bill for a dual fuel customer was now £1,127, down £132 on the start of the year, making British Gas the cheapest in the UK for customers paying by monthly direct debit. Mr Bentley said the recent fall in wholesale electricity prices had enabled it to reduce tariffs.
However, the Consumer Focus watchdog insisted that the move should have been made earlier. Robert Hammond, its energy expert, said: “This is a very disappointing announcement for consumers, particularly as it is likely to set the tone for the level of energy price cuts across the board. We would have expected much bigger reductions considering that wholesale gas and electricity prices are half what they were at their peak last year.
“This again raises the question of whether wholesale price cuts are being fairly passed on. To answer customers’ questions over whether they are getting a fair deal, Ofgem must commit to a date for its long-awaited review of the wholesale market.”
Mr Hammond said that recent price cuts had lifted as many as 160,000 homes out of “fuel poverty” – whereby more than 10 per cent of income is spent on energy – but that at least as many will have been pushed to that level by growing unemployment.
However, Mark Todd, director at Energyhelpline, the switching advisory service, said: “At last we have a decent double-digit price cut after the tiny reductions announced by many suppliers. British Gas now has the cheapest standard tariff for dual-fuel customers. Other suppliers will hate this and we expect them to retaliate soon with price cuts of their own.”
Mike O’Brien, Energy and Climate Change Minister, said: “It is important to see energy companies passing on wholesale price cuts to their customers. We will continue to press for this as far and as fast as possible.”
Meanwhile, Wulf Bernotat, the chief executive of E.ON, has announced that he will step down next year after running the company, Germany’s biggest utility, since 2003.
Source: The Times
No comments:
Post a Comment