Just over two weeks after E.ON announced that it would drop prices for its standard plan customers, all six of the big energy suppliers have followed suit with cuts of their own.
EDF Energy was the final big supplier to state its cut of 1.3%, effective 11 February.
‘Phoney price war’
The price reductions range in the amounts — from EDF’s 1.3% to npower’s 5.1% — and in their date of implementation — from E.ON’s effective date of 13 January to SSE’s of 30 April — causing critics to cry foul.
In addition to the relatively low cuts, the change only impacts customers on standard plans, and only applies to gas costs (those on electricity only tariffs will see no change on their bills).
Citizens Advice made note of the difference between the average cost of a supplier’s standard tariff as compared to that of the same supplier’s cheapest plan — more than £200 in half the cases — and as such have dubbed the cuts a ‘phoney price war’.
Gillian Guy, Chief Executive of Citizens Advice, said:
“Energy firms are engaging in a phoney price war. Token energy price cuts to standard tariffs do not reflect the big savings that energy firms can pass on to households. Npower customers could save as much as £240 by switching to their cheapest available tariff but they are cutting prices by a fraction of this.
“Cheap deals are great for customers and any price cut for energy customers struggling to make ends meet is welcome, but it should not be only the savviest consumers who benefit from the four year low in wholesale energy costs. Many who currently do not switch are those whose finances are the most stretched, including older people and low-income families. Customers on energy prepayment meters can pay a yearly average of £80 or more for a second-class service. Energy suppliers must pass on savings to all their customers, not just those able to switch to get the best deals.”
Despite cuts, many customers ‘aren’t getting a fair deal’
These sentiments was shared by uSwitch Director of Consumer Policy Ann Robinson:
“With the final price cut announced, it’s now official that standard tariff customers simply aren’t getting a fair deal. These meagre reductions are too little too late and must be increased to help hard-pressed consumers struggling with their energy bills this winter.
“And, with wholesale electricity costs also falling over the past year, why hasn’t a single big six supplier pledged to cut electric bills for its customers?
“To tackle high energy costs, consumers should take matters into their own hands and shop around for a better deal. With a £347 a year difference between the average big six standard tariff and the cheapest fixed deal on the market, consumers would be better off making their own price cut by switching.”
Cheapest plans versus standard plans
|Supplier||Effective date of price cut||Standard dual fuel cost after cut||Current cheapest dual fuel plan||Price difference versus Standard dual fuel plan|
|E.ON||already in effect||£1,145 (down £24)||£920||£225 cheaper|
|ScottishPower||20th February||£1,167 (down £32)||£930||£237 cheaper|
|npower||16th February||£1,169 (down £36)||£963||£206 cheaper|
|EDF Energy||11th February||£1,155 (down £9)||£999||£156 cheaper|
|SSE||30th April||£1,158 (down £28)||£1,174||£16 more|
|British Gas||27th February||£1,156 (down £37)||£1,183||£27 more|