In a month known for its doom and gloom, energy customers might be feeling a little less of the January blues, with the announcement that several big energy firms are to cut their energy costs.
On Wednesday, EDF Energy became the first of the “Big Six” energy providers to cut energy costs, by announcing a 5% drop in its average gas prices. While electricity prices will remain unchanged, from 7 February customers will see the reduction come into force. Just two months ago the company had increased their gas prices by 15.4 percent%
“We know customers are finding it difficult, particularly during winter. So I am pleased we have been able to make this announcement now and help our customers at a time they use more gas,” said Martin Lawrence, EDF Energy’s managing director of customer supply.
Increasing the pressure on their counterparts to make similar cuts, British Gas followed suit by announcing plans to implement their own reductions, cutting its standard electricity tariff by 5% with immediate effect. The move will see 5.3 million of its customers benefit from a saving of around £24 on their average annual electricity bills. The company, which has no plans to bring down its gas prices, said the reduction will make them the cheapest for electricity.
The announcement comes just six months after British Gas customers had to endure a massive 18% increase in gas bills, whilst electricity costs were hiked by an average 16%.
“We want to keep prices as low as possible for our customers. Household budgets are stretched, and we are doing everything we can to help our customers keep their bills down,” commented Ian Peters, Managing Director for Energy.
Energy suppliers came under fire last year for hiking their prices, given the falling cost of wholesale energy. Consequently, they have faced mounting pressure from consumer groups and the Government to pass on the reduction to customers by cutting their energy costs.
Hot on the heels of EDF and British Gas, Scottish and Southern Energy (SSE) will be cutting 5% off their gas prices from 26 March, resulting in an annual saving of around £28 annually for its 3.4 million customers. While Npower has also bowed to pressure and confirmed plans to cut gas prices by 5% from 1 February.
Disappointingly, none of the aforementioned energy providers have announced plans to implement duel fuel cuts. E.On and Scottish Power have yet to make similar price cuts, although with four out of the six major suppliers dropping their prices it’s only a matter of time.
For British Gas, EDF, Npower and SSE, the move is no doubt designed to try and improve their reputations, which are at an all-time low. But for most customers such minuscule reductions will have little impact on their central heating and household energy bills.
Quite simply, it’s a case of too little, too late.