Wholesale gas prices are down by around 25%, tracking down diving N. Sea crude oil prices, which have halved since summer last year.
Centrica is the second of the UK/ Scottish Big Six energy suppliers to pass on the fall in wholesale energy costs to consumers and this move will put further pressure on the rest of the ‘pack of six.
The cut will result in an average energy bill reduction of £37 a year for Scottish Gas customers. It follows a recent call by Scottish Energy Minister for household energy companies across the UK to pass on wholesale price savings – as expressed in a letter last week to Energy UK, the trade association for domestic energy suppliers.
Big Six rival supplier E.ON announced a 3.5% cut in its gas tariffs last week. The other major suppliers are EDF Energy, SSE, Scottish Power and RWE npower. Whitman Howard utilities analyst Angelos Anastasiou. Commented: “It is likely that some or all of the remaining Big Six suppliers will look to offer some price cuts of their own”.
Centrica’s price cut also marks a positive start to Iain Conn’s new leadership of the utility after the former BP executive took the helm three weeks ago. He said: “We’ve been watching the significant moves in the international energy market extremely closely for some time, with the aim of helping customers with a price cut at the earliest possible opportunity”.
But British Gas Finance Director Michael Uzielli later said: “We’ve been watching this price fall for many weeks and months and it really hasn’t been driven by anything in the politics,”
Like E.ON, Centrica has not reduced its electricity prices, saying that wholesale costs had ‘not come down as much as in the gas market.’
British Energy Minister Ed Davey welcomed Scottish/ British Gas decision to cut household gas prices, saying it was ‘welcome news’ for consumers.
Scottish Energy News:
‘Winter Warmer energy tariffs’ Special Edition Feb 2015
Scottish Energy News is producing a special ‘Winter Warmer’ special supplement. This will be published in February 2015 and will focus in-depth and in detail on what tariffs and which policies major UK energy suppliers have to help consumers at this time of year.
Not only is this particularly pertinent in a country where 40% of homes suffer from fuel-poverty, it also brings into focus the greater democratic oversight which the Scottish Parliament will have to scrutinise, and to hold to account – for the first time – energy providers across the new UK under Smith Commission devolution powers (and not just those domiciled or registered in Scotland).
This Special Edition provides a platform – which is read at least once every day by 75% of the MSPs in the Scottish Parliament, and many more in Westminster and Brussels.
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