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Scottish Power Takes the Lead in Reducing Domestic Gas Prices

By David Holmes on April 15, 2010

EnergyIn recent weeks, British Gas, E.ON, Npower and Scottish & Southern Energy announced price cuts for domestic gas consumers. Ordinarily, price cuts would be welcomed by customers; however, discontent has been fomented by various consumer watchdogs who claim that the leading energy companies have failed to pass wholesale fuel savings on to customers in good time.

Furthermore, it has been argued in some quarters that the cuts by British Gas, E.ON, Npower and Scottish & Southern Energy, which range from 6-7%, are not substantial enough and that the organisations have acted in an anti-competitive way by offering customers similar price cuts. This week, Scottish Power and EDF Energy have changed the game to a certain extent by offering the highest and lowest price cuts respectively.

EDF Energy was the first to announce that it would cut its prices for domestic gas customers – albeit only by 4%, which amounts to a saving of just £30 per year on average. Hours after EDF Energy showed its hand, Scottish Power raised the stakes considerably by announcing that it would reduce its gas prices by a relatively enormous 8%, which is the equivalent of a £66 saving on the average annual gas bill.

Whilst many of Scottish Power’s 1.6 million gas customers are likely to be pleased by an 8% price drop, EDF Energy’s customers will no doubt feel somewhat aggrieved; however, it is quite possible that EDF Energy will announce a more substantial price cut over the coming months, as the leading energy companies usually follow each other in this respect, which is an obvious cause for concern in what ought to be a free and competitive market.

Director of, Mark Todd, said: “Although any cut is welcome, this is a token gesture by EDF and hardly worth the wait”.‘s Gareth Kloet added: “Energy suppliers are acting like a pack by all cutting around the same amount, despite the fact that energy regulator Ofgem recently concluded they are making profits amounting to around £105 a year per energy customer”.