E.On to cut gas prices by 5.1%
20/01/2015
Energy provider E.On has announced a 5.1% reduction in their gas prices, making them the first of the UK’s big six energy suppliers to cut prices after increased pressure from Ofgem, politicians and campaign groups.
E.On has claimed that the cut, which will be effective from 1st February, will help families save an average of £32 per year. It is the first time in six months that any of the big six energy suppliers have cut their prices.
Last week, energy regulator Ofgem, energy campaign groups and the Prime Minister expressed concerns that gas prices were not being reduced for consumers in line with the fall in the wholesale cost. Analysts have found that wholesale gas prices fell by 34% during 2015, and power prices fell by 23%.
E.On’s price cut is now likely to increase pressure on the other energy companies to follow suit. Ann Robinson, the director of policy at price comparison site Uswitch said:
"With wholesale prices predicted to remain low this year, consumers should be seeing bill reductions of at least 10% - around £120 a year - on both gas and electricity."
E.On has defended its price cut of 5.1%, claiming that it had to consider other factors apart from wholesale prices. Tony Cocker, the chief executive of E.On said:
"The underlying position is that whilst the price we pay for our customers' energy has fallen, we also have to take account of managing the various other risks in the market which can change, and the fact that many of the other costs that we don't control - but do have to bear - have increased or may increase.”
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