18th Jan 12
Scottish power reduces gas prices
by Harry Oldfield
Catching on: last big energy provider 'happy' to pass on whoesale price reductions
Catching on: last big energy provider 'happy' to pass on whoesale price reductions
Scottish Power has announced reductions in its tariffs and in doing so becomes the last of the UK’s big six energy suppliers to cut prices.
The company said that approximately 1.4 million gas customers would receive reduced domestic gas bills from February, with prices set to drop by five per cent on average. This was said to be equal to a yearly savings of £36 for both gas only and dual fuel monthly direct debit customers.
The group’s CEO of energy, retail and generation Neil Clitheroe said that their customers want competitive costs from a responsible provider. He explained that they understand that household budgets during tough economic times are tight and that they are happy to have the chance to pass on reduced wholesale prices to help their customers.
Mr Clitheroe went on to say that in October last year they vowed not to raise the standard prices for electricity and gas during the winter months, and extending until at least April this year. The reduction will begin on 27 February.
However, Scottish Power warned that the rapidly-growing global demand for energy is inevitably going to lead to increased prices over the long term, and Mr Clitheroe said that the supplier had already secured most of its “energy requirements” for the current winter. Customers have been advised to contact their provider to ensure they have the best tariff possible for their circumstances.
Scottish Power’s announcement came on the back of E.ON announcing a drop of six per cent in its electricity bills, a move which is reported to be benefitting 3.7 million of its customers. Likewise, this move will come into force on 27 February, and cut an average of £31 of the yearly bill. However, the company left the price of gas unchanged.
Scottish Power and E.ON were the last two of the UK’s big six energy suppliers to announce a reduction in recent days following falls in wholesale prices, but none has opted to cut both electricity and gas prices.
Last week British Gas cut bills for over five million customers by introducing an immediate average reduction of five per cent in the company’s standard electricity tariff. Southern Electric and SSE said it would reduce the price of domestic gas by 4.5 per cent starting on 26 March, while EDF will cut the price of gas by five per cent starting 7 February.
However, the falls in prices introduced by the big six companies to not compensate for increases seen recently. All six put gas and electricity prices up during the summer or autumn after increases last winter, laying the blame on rising wholesale costs. Suppliers have also faced criticism for not cutting bills as quickly as they increased them.
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