Gas and electricity Updated:
EDF has become the last of the Big Six to cut its standard gas prices in the wake of falling wholesale costs, announcing a reduction of 1.3%. The cut is due to come into effect on 11 February – far sooner than many other suppliers – and is set to benefit around 1 million customers, but the level of reduction has, unsurprisingly, come under sharp criticism.
EDF says that the 1.3% cut means its standard dual fuel prices will now be cheaper than all but one of the major suppliers, coming in at an average of £1,155 per year – a drop of just £9. It also states that the latest move follows four cuts to short-term fixed tariffs in the last year, and says it's committed to helping vulnerable customers and will write to them to offer further support.
The company has also explained its limited price cut, and it mirrors that of other suppliers. "The 1.3% price reduction announced today is linked to the recent falls in wholesale gas costs," it said in a statement. "However, the vast majority of gas that EDF Energy bought for its customers was purchased well in advance and at previously higher prices.
"This, and the low standard prices already offered by EDF Energy, has limited the size of today's reduction. If wholesale gas costs continue to fall in the coming months allowing further price reductions, EDF Energy will pass these on to customers as soon as possible."
For many, that response simply won't be good enough, particularly in light of industry regulator Ofgem finding that suppliers' profit margins are increasing as a result of falling wholesale costs. It's by far the smallest cut from any of the Big Six, too, so customers may find it difficult to see the benefit.
Mark Todd, director of energyhelpline.com, commented on the latest announcement: "If you thought the price cuts made by the other Big Six energy firms were meagre, then EDF has just beaten them all with a minuscule 1.3%. Consumers will struggle to notice it in their next energy bills.
"Clearly, more price cuts could be passed on to customers if suppliers were being generous. Wholesale gas prices keep dropping and are now 37% down off their peak, yet consumer prices have only come down by 4% on average. Our analysis at energyhelpline.com shows that if all the wholesale falls were passed on, then 11% price cuts would be possible, even taking into account forward buying and other factors. Instead, we are getting cuts of just 2-3% off our bills."
Unfortunately, even though suppliers themselves are making significant savings, it doesn't look as though they're going to pass on more substantial cuts to consumers. So just what can you do? Really, there's only one thing for it – compare the options yourself.
Being proactive and seeing what tariffs are available could well pay dividends, particularly if you're on a standard tariff, as fixed rates tend to be far cheaper. The savings could be marked – according to energyhelpline.com, the cheapest fixed tariff stands at just £914, some £412 cheaper than the average annual price. So, rather than settling for a meagre £9 off your fuel bills each year, why not see if you can save upwards of £400?
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