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Energy cuts should have been faster and further


The recent cuts that the “Big Six” energy companies made to customers bills could have been much bigger and have been made a lot earlier, according to consumer body Which?.

Research carried out by Which? showed that energy companies have been keeping prices artificially high, and bills could have been cut "further and sooner" than the reductions announced in January. UK households on standard energy tariffs are now £145 worse off than last year, analysis has shown.

Which? has claimed the results of the research shows that households are at a disadvantage due to lack of competition in the energy industry. The “Big Six” energy suppliers, SSE, Scottish Power, Centrica, RWE Npower, E.On and EDF Energy, together account for about 95% of the UK's energy supply market. The lack of smaller companies offering lower tariffs does not add sufficient competitive pressure of the major suppliers to cut bills faster and further, even when wholesale energy prices fall.

Which? executive director Richard Lloyd said:
"Our analysis places a massive question mark over how suppliers have been setting prices over the last two years.
"They now need to explain to their customers why bills don't fall further in response to dropping wholesale prices."

Which? has worked out that due to the fall in wholesale prices, the cuts the “Big Six” energy companies made of up to 5.1%, should actually have been up to 10.3%.

Industry body Energy UK said firms cut prices as soon as they were able to, due to the wholesale purchase of energy.

Energy UK chief executive Lawrence Slade said:
"As prices are falling, as companies can actually afford to pass those savings on, they are doing so.
“You can't suddenly pass the savings in one chunk, it's only as your buying strategy unwinds and as you can take advantage of those new lower wholesale prices that you can pass these on to your customers"

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