13th Jan 12
British Gas and SSE lower energy bills
by Sally Davies
Hotting up: British Gas follows suit in reducing prices but bills still up overall
Hotting up: British Gas follows suit in reducing prices but bills still up overall
British Gas has cut household electricity prices with immediate effect by five per cent, but said it could not follow other providers in reducing the price of gas, which it increased by 18 per cent last summer.
Elsewhere, less than two hours after the announcement by British Gas, SSE, which also raised gas prices by 18 per cent in 2011, said that it would cut domestic gas bills by 4.5 per cent from the end of March. The UK’s ‘Big Six’ energy suppliers are trying to respond to increasing pressure to pass savings being made in wholesale prices on to customers.
EDF Energy, another of the suppliers, announced a cut of five per cent on its gas prices on Wednesday, with the energy secretary Chris Huhne suggesting that consumers should walk away from these companies should their prices not be reduced.
British Gas said that the reduction of five per cent would work out as an average savings of £24 on yearly electricity bills for around 5.3 million customers, and mean the provider will become the least expensive for standard electricity. However, British Gas customers’ energy bills will stay well above the levels seen before the firm increased prices for both electricity and gas last summer.
In August, its increases saw electricity prices rise by 16 per cent, or £71, for an average bill, while gas prices went up by 18 per cent, or £121. This took total annual bills from £1,096 to £1,288.
British Gas’s managing director for energy Ian Peters said that they want prices to remain as low as possible. He said that they are aware household budgets are tight, and that they are doing everything they can to help their customers keep their energy bills down.
The Centrica-owned company said it had been unable to reduce gas prices due to the amount of gas customers it supplied. It said that British Gas provides half the homes in the UK and it must buy energy in advance in order to protect its customers against any dramatic spikes in prices – such as was seen last winter. It added that while there have been the occasional short-term fall in gas costs, the longer term trend remains upward.
SSE’s gas price reduction will be introduced on 26 March and will save its 3.5 million customers roughly £28 per year, revealed the company. The Big Six providers have faced increasing pressure from consumer groups and the government to reduce bills because wholesale gas prices have dropped since August.
The UK’s biggest energy suppliers have been trying to improve public relations in the face of ongoing criticism, while the developments this week highlight the scramble among them to be seen as taking the first steps.
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