With oil and gas prices at historic lows, why have the Big Six not cut their energy prices?

Big Six logo montageWholesale gas and electricity prices are at historically low levels in the UK, implying pressure on the energy suppliers in terms of why they haven’t cut domestic energy tariffs. 

David Hunter, an energy industry analyst with Schneider Electric, said: “It’s time for the ‘Big Six’ to cut their prices.

“Despite the downward trend of wholesale energy prices over the past two years, with one exception, it has been a year since the they cut gas tariffs and two years since electricity tariffs were touched.

 “Fuel prices on the other hand have fallen sharply as a direct result of the drop in crude oil value – the lowest it’s been in 12 years. These savings have largely been passed through to customers. Yet the same hasn’t happened for network energy – the excuse of higher grid and green costs just isn’t enough to justify the status quo.

 “Fuel costs aren’t going to stay low forever, but if energy suppliers can’t reduce their prices now, when can they? The silent majority sitting on expensive standard tariffs need to act. We’ve enjoyed a mild winter so customers have used less gas than expected but the cold weather is setting in and they’re going to feel the pinch.

 “In the meantime, we urge customers to shop around for the many cheaper deals that are available, and to ‘fix the roof while the sun is shining’ by investing their fuel and energy savings in efficiency measures that can protect them from inevitable cost increases in future years.”

In reply, Lawrence Slade, Chief Executive of Energy UK – whose members include the Big Six – said: “Energy companies are bringing down their prices with cheaper tariffs launched almost every week.

“Since January 2014 the cheapest tariffs have fallen by around £200. There are now over 50 deals under £1,000 being offered by 30 suppliers operating in the market.

“Wholesale fuel prices make up less than half of the average bill and the majority of the rest falls outside suppliers’ control – so there will always be a difference between wholesale price falls and what customers actually pay. 

 “Suppliers are also making it quicker and easier for customers to find the tariff right for them.  Almost four million customers switched supplier in 2015 and, currently, around 400,000 households are signing up to new deals every month.”

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