UK Gas and electricity prices could fall due to mild winter

The mild winter could see a dramatic fall of up to ten per cent in the cost of gas and electricity to the UK consumer.

The big six utility suppliers overstocked on gas believing that the winter would be a lot colder than it has been, as it was in the last two winters. This means that the wholesale cost of gas has fallen by as much as 25 per cent.

Two smaller players in the energy market have announced reductions in tariffs,
The Co-operative announced a three per cent fall to take effect from February and this week OVO announced a five per cent drop in dual fuel tariffs for new and existing customers to take effect immediately.

It is hoped that the bigger energy companies will be forced to drop their prices to avoid losing customers to these smaller players in the utility market.
This has ramped up the pressure for the big six energy suppliers to follow suit.

Industry experts and consumer watchdog groups say that British Gas, who supply energy to 16 million UK homes can afford to cut retail prices by as much as ten per cent.

The energy companies have come in for strong criticism by customers and consumer groups alike and have been quick to pass on higher wholesale costs to customers. Now that the wholesale cost has come down it remains to be seen if they will be as quick to reduce prices as they were to raise them.

A spokesman for Centrica, parent company of British Gas said: “Clearly we need to remain competitive and we have to heed the market place.”
Energy watchdog Ofgem said: “The big suppliers have a responsibility to pass on savings.”

07/01/2012 - myfinances.co.uk

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