Scottish Power cuts gas bills by 5 per cent - but says 'prices will rise in the long-term'

Scottish Power has become the last of the 'big six' firms to announce a price cut by reducing its gas bills by 5 per cent from 27 February.

The reduction will affect 1.4million customers, knocking £36 off bills for duel fuel and gas only monthly direct debit customers. 

The firm said that it has been able to make the cuts due to recent falls in wholesale costs, but that in the long term prices will rise.

Energy firms buy and sell gas and power on the wholesale market, typically in advance to secure the amount of energy they think they will need to supply to
customers. Neil Clitheroe, ScottishPower’s chief executive officer of energy retail and generation, said: 'We have already secured the majority of our energy requirements for this winter. It is important that we do this to ensure we have sufficient supplies when our customers need them and to protect customers from the impact of volatile movements in the wholesale energy market.

'Although there has been a short-term fluctuation in the wholesale gas market that has allowed us to pass on today’s reductions, the global demand for energy is increasing faster than its supply. This will inevitably lead to higher energy costs in the long-term.'

The firm joins EDF Energy, British Gas, npower, Scottish and Southern Energy (SSE) and E.ON, who have all announced a price reductions due to a recent fall in wholesale costs, but this month's round of cuts are nowhere near the rises implemented by the energy giants in the autumn. Yesterday E.ON announced a 6 per cent cut to its electricity prices affecting 3.7million customers.

Last week npower cut its gas price by 5 per cent, while British Gas shaved 5 per cent off its electricity prices and SSE announced a 3.8 per cent reduction to gas bills.

Two weeks ago EDF Energy was the first firm to announce a price cut, wiping 5 per cent off gas bills for 1.4million of its 3.8million customers.

Scottish Power also promised to not increase standard prices for gas and electricity over the winter months, until at least 1 April this year. Ann Robinson, director of consumer policy at uSwitch.com, said: 'The fact is that these cuts will not even come close to wiping out last year’s eye watering price hikes and even if there is a further cut later this year they are still unlikely to do so.'

17/01/2012 - dailymail.co.uk

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