E.ON have announced a 5.1% drop in their gas price, for the 2 million customers on their Standard Tariff. Coming in to effect on February 1st, the price decrease knocks £32 off the average annual bill.
In recent week’s politicians, OFGEM and poverty campaigners called for the “Big Six” energy suppliers to cut their prices in line with the fall in the price of crude oil and gas over the last year. So far, E.ON are the only one of the large suppliers to decrease their prices in the last 6 months.
However, E.ON defended the lack of price reductions. As large energy suppliers have to take in to account factors other than wholesale prices.
As a result Tony Cocker, E.ON’S Chief Executive, defended the 5.1% price drop:
“The underlying position is that whilst the price we pay for our customers’ energy has fallen, we also have to take account of managing the various other risks in the market which can change, and the fact that many of the other costs that we don’t control – but do have to bear – have increased or may increase.
Once you’ve built in various uncertainties and other factors, while the wholesale market movements may translate across to a dual fuel domestic bill for a drop in prices of under 10%, the inclusion of those other factors translates the percentage to the standard gas cut announced today”
The average annual bill for customers on E.ON’s standard tariff is now £1047 for those who pay by direct debit. E.ON have also launched a new tariff, E.ON Energy Fixed 1 Year. This tariff has an average annual price of £783 and today, this is the cheapest tariff on the market. So, those on E.ON’s standard tariff could benefit further, simply by changing their price plan.
Commenting on E.ON’s price announcement, Energy Regulator, OFGEM’s CEO Dermot Nolan said:
“This is a step in the right direction and it is good to see some movement in energy prices for consumers. We have consistently called on suppliers to explain why retail prices are not falling and this price cut goes some way towards addressing that challenge.”
The Energy Market has been under extreme scrutiny over the last 18 months, as the Competition and Markets Authority has been investigating the energy market. The final report is due in April of this year.
Source:: E.ON Reduce Gas Prices