E.On announces 6% gas price reduction

UK energy provider E.On has today revealed plans to cut 6% from the cost of gas from the end of March. This move has been welcomed by consumer groups although it is evident that only 1.9 million of the company's 5.5 million customers will benefit as electricity only customers will see no reductions and those on fixed rate tariffs will not benefit either. E.On is the third of the U.K.'s larger energy providers to reduce prices over the last month as pressure grows from politicians and consumer groups.

The average dual fuel bill for E.On customers will fall from £1,232 to £1,185 although it is worth noting that even after the reduction in the average dual fuel bill, E.On customers will still be paying 30% more than they were in January 2008. This perfectly reflects the difficulties felt by UK consumers and UK businesses as energy costs have risen significantly over the last two years, despite promises and pressure from the political scene.

Slowly but surely we are starting to see wholesale gas price reductions filtering through to the market although many consumer groups and indeed the regulator Ofgem are concerned at the relatively slow speed at which price reductions are being passed on.