E.ON cuts price of standard gas tariff
Energy giant E.ON is to reduce standard gas prices by 5.1% from 1 February – the equivalent of three weeks’ gas use – for customers on its standard and pre-paid tariffs.
E.ON is the first of the Big Six providers (British Gas, EDF, Npower, Scottish Power and SSE) to cut its prices this year and it says the move will benefit nearly two million of its 4.5 million customer database.
The move comes just a week after Prime Minister David Cameron criticised suppliers for failing to cut the cost of household bills despite a fall in wholesale energy prices.
E.ON confirmed there’s no change to electricity prices or for those on E.ON’s fixed tariff.
But it has also unveiled a new one year fixed dual fuel tariff with an average annual price of £783 and a two year fixed tariff for those aged 60 or over.
It claims these are the cheapest tariffs available on the market today and any E.ON customer already on one of its fixed tariffs can switch without being hit by exit penalties.
Experts said the cost cuts did not go far enough and customers could save more by switching.
James Padmore, head of energy at comparethemarket.com, said: “You wait an aeon for a price cut, and when it comes it is nowhere near enough. While 5.1% sounds decent, in reality it is a meagre gesture. £32 off the average annual bill is not a lot, particularly when you consider that households stand to save £336 on average a year by switching supplier.
“Wholesale gas prices have fallen by around 50% in the past two years – this cut doesn’t come near to reflecting this, even when you factor in other costs. E.ON is likely responding to a drop off in customer numbers – last month alone saw 26% of all energy switchers on our site move away from E.ON, largely to a smaller supplier.”
He adds that he expects the rest of the Big Six to come under pressure to announce their own cuts.