The Big Six energy providers have come under fire for failing to pass on the full savings they are making from plummeting wholesale gas and electricity prices.
Critics said the price cuts announced so far – by E.ON last week and by British Gas today – were “measly” and expressed anger that the other four major suppliers have yet to reduce bills at all.
British Gas announced yesterday that it will cut bills – but only by 5 per cent, and not until the end of next month, when the coldest weather is likely to be over. The price reduction will apply only to gas, with electricity rates staying the same.
The energy provider, which supplies 6.8 million UK households, insisted the price cut was the biggest it could manage and would save customers £37 a year each on average.
British Gas said that it was passing as much of the falling wholesale costs on to its consumers as it could but said that most of the gas currently being used in customers’ homes had been bought at higher prices a long time in advance.
But consumer groups said the discount was nowhere near big enough given that wholesale gas prices have tumbled by about 30 per cent in the past year. They also criticised the decision to postpone the reduction until 27 February.
Consumer campaigners said British Gas should be cutting electricity prices as well, since wholesale costs have fallen by about 15 per cent in the past 12 months.
The Labour leader, Ed Miliband, said: “A 5 per cent fall is too little and it is too late. It is not nearly good enough.”
Caroline Flint, Labour’s shadow Energy Secretary, said the cuts made by the Big Six so far had been “measly”.
The executive director of Which?, Richard Lloyd, said: “This is another modest price cut for consumers in response to a significant shift in wholesale prices,” adding that the ongoing competition investigation into the Big Six “must look at whether falling wholesale energy costs are passed on fairly, or whether a lack of competition leaves us all out of pocket”.
Ann Robinson, of the uSwitch price-comparison website, said British Gas and the other Big Six companies should be knocking at least a tenth of the price off both gas and electricity, saving customers more than £120 a year on average.
“Customers have a right to feel disappointed at these price cuts. They should have cut electricity as well. And I don’t buy the idea that it’s all down to buying the gas in advance,” she said.Reuse content