E.ON joined its competitors by announcing a 6% cut in its domestic gas prices today. It follows British Gas’ 7% and Scottish & Southern Energy’s 4% price cuts over the past few weeks, leaving nPower, EDF and Scottish Power to make their move.
Today’s cut means the average annual E.ON dual fuel bill will reduce from £1,232 to £1,185. This is good news for around 1.9 out of its 5.5 million customers, because those on electricity only or fixed tariffs will not feel the benefit.
Speaking of their price cut, E.ON’s retail managing director Graham Bartlett said, ‘We’ve been very aware of the effect of both the recession and the exceptionally cold winter on our customers, especially those most in need, so we are pleased to see the opportunity to now reduce prices.’
Although consumer groups have responded positively to the news, they have also been critical of the time energy suppliers have taken to cut their prices despite the unusually cold winter and the drop in wholesale prices. This has resulted in millions of households struggling to pay their energy bills.
Bartlett defended E.ON’s position by adding wholesale prices were, ‘only part of the pricing story as our customers are using gas bought over a number of years at much higher prices than today’.
E.ON’s price cut will be effective from 31st March, and those on its WarmAssist program will benefit from a back-dated low price starting from March 1st. Although this is the third price cut within 12 months, E.ON‘s average annual dual fuel bill remains around 30% higher than January 2008 according to the price comparison website uSwitch.com.
uSwitch.com’s Ann Robinson said, ‘This will not make up the ground lost two years ago when suppliers increased prices by 42% or £381 and we now expect household energy bills to end up around £270 higher than two years ago, putting even more emphasis on the need for consumers to start managing their energy costs.”
She also added, ‘Now that three of the big six have moved we can also see a clear trend emerging with gas price cuts coming in at around 5% or £40.’
Sources:
http://www.guardian.co.uk/money/2010/mar/08/eon-cuts-gas-prices
http://www.timesonline.co.uk/tol/money/consumer_affairs/article7053897.ece
