The energy supplier SSE has become the latest of the big six suppliers to cut household gas prices, but its announcement left it facing accusations of profiteering and ripping off customers.
SSE said it would cut UK domestic gas prices by an average of 5.3 per cent on its standard tariff from 29 March. British Gas announced a similar move last summer and last week E.ON said it would reduce prices by 5.1 per cent from 1 February.
Critics pointed out that delaying its own cut until almost April would boost SSE’s profits by an estimated £24m, while meaning that customers do not benefit until winter is over.
The move also reignited widescale complaints that the big six have been overcharging families against a backdrop of falling wholesale energy prices, down 23 per cent last year.
Will Morris, the managing director of retail at SSE, defended the small decrease. “Wholesale energy prices account for an ever-smaller proportion of the bill and there are different cost issues affecting electricity and gas,” he said. SSE claims the cut will give save customers £32 a year on their bills.
The Energy Secretary, Amber Rudd, gave the reduction a cautious welcome. “The market must provide a fair deal for consumers and that’s why I’ve been pressing energy companies to put their customers first and pass on savings to them,” she said. “SSE has taken a step in the right direction.”
The other big companies – EDF, Npower and ScottishPower – are almost certain to follow with similar announcements soon, with none expected to break ranks and offer deeper price reductions to customers.
SSE also revealed that 300,000 of its gas and electricity customers in the UK and Ireland had switched to other suppliers in the past year, taking its total down to 8.28 million. Like the rest of the big six, it has been hit by the rise of independent suppliers, which now hold 15 per cent of the market.