With wholesale gas and electricity prices in the UK at a five-year low, many people are questing why energy suppliers are not lowering energy prices to match.
The simple reason for this, if you want one, is greed. But energy suppliers will spin you a story about buying their energy well in advance. Whether or not that is the case, they will have still bought their energy at a significantly lower cost than what they are charging you, so if you want to call them greedy, feel free to shout it from the rooftops.
However, some energy suppliers have cut their energy prices. Here’s the low-down:
Energy supplier price cuts in 2016
SSE Airtricity announced on the 11th January that they will cut prices by 1.3 percent through 2016.
SSE are one of the big six energy suppliers, who also operate the Atlantic and Scottish Hydro brands. Price cuts in 2016 for customers of these brands have not yet been made. It is thought that price cuts for Atlantic and Scottish Hydro customers will follow.
Update 21/01/16 – E.ON has announced customers will receive a 5.1% cut in their gas bills from February 2016. This equates to a saving of around £32 every year.
Update 28/01/16 – SSE has announced that from 29 March its standard gas tariff for domestic customers will be cut by 5.3%, saving a typical customer £32 a year.
Update 12/02/16 – EDF, one of the big six energy suppliers, has announced gas price cuts of 5.1 percent coming into effect from March 24.
Update 13/02/16 – British Gas has announced that from 16 March they will cut the price of their standard gas tariff by 5.1 percent.
Update 18/02/16 – Ecotricity has announced that from April they will cut the price of their only tariff, Green Gas, by 7% saving customers £50 a year.
Update 21/03/16 – The Telegraph are reporting that the Competition and Markets Authority are expected to propose a safeguard tariff soon. The tariff, which would become standard in the industry, could see millions of people with prepayment meters pay less for their energy.
Price cuts in 2015
Last year, a number of energy suppliers reduced their energy prices. British Gas cut its gas prices by 5 percent in August 2015 and SSE cut energy prices by 8 percent in April 2015.
In addition to this, Npower have cut their gas prices by 5.1 percent on average for customers on their Standard gas tariff since February 2015, while EDF have cut gas prices by 1.3 percent for customers over the same period. Customers on a variable tariff were still paying too much though.
Ofgem is getting involved
No matter what spin energy suppliers give us, Ofgem aren’t having it.
They have said that energy companies are “overcharging in many cases” with prices failing to fall in line with dropping wholesale costs. They also said that most customers are stuck on standard variable tariffs, which haven’t seen price cuts for over a year.
Prime Minister David Cameron also told MPs this week that energy prices are “not falling as fast as he would like” in response to a survey claiming that three in five older people will have to ration their heating this winter amid fears over bills. He said, “We’ve also got in this country now falling energy prices because of the falling oil price,” before admitting “I agree that they’re not falling as fast as I would like.”
No solution in sight – except one
Despite Ofgem’s criticisms, many people have criticised Ofgem themselves for lacking any power to do anything about the current state of the energy market.
MPs have constantly called for price cuts and consumer group Which? Have done the same over the last five years. But no ground has been made and energy prices are no better now than they were a few years ago. Energy suppliers are still forcing us to pay a lot for our energy, and in a world where poverty in this country is very real, that’s a huge problem.
But, not all energy suppliers are ripping us off. Ovo Energy and Utilita certainly aren’t. So there are still energy suppliers out there who you can trust, and you aren’t forced to stay with your current supplier. Read our switching guide to find out how you can switch today.