Energy Firms Could Afford To Slash Gas Bills By 107 As Wholesale Prices Tumble
Energy giants could afford to slash the average gas bill by £107 a year, it has been claimed.
Wholesale gas prices have tumbled by 28% since suppliers last imposed price hikes, in November 2013.
Mark Todd, co-founder of price comparison website Energyhelpline.com, believes it means energy firms could knock 14% off bills – equivalent to £107 a year for the average customer.
He also claims suppliers can reduce electricity bills by 5% – or £28 a year.
Wholesale costs account for around half the average gas bill and a third of the electricity element.
While big energy firms have refused to cut standard tariffs paid by most customers, they have launched cheaper deals, often only available online, to bring in new business.
Mr Todd said: “Suppliers appear to be putting profits before their customers who are being punished for loyalty.”
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His claim came as Labour blasted George Osborne’s attempt to get energy firms to pass on savings.
The Chancellor has launched a Treasury investigation into whether companies are cashing in on a slump in oil prices, which fell below $50 a barrel today.
Shadow Energy Secretary Caroline Flint said in a letter to Mr Osborne: “Over the last five years the Government has shown that it will not stand up to the Big Six energy firms.
“You have stood by while bills have soared and allowed energy companies to get away with raising prices when wholesale costs increase, but not passing on reductions in wholesale costs to consumers.
“We do not need another investigation – we already have one and we know what the problem is. We need action.”
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The Competition and Markets Authority is currently conducting an inquiry into the sector.
One analyst branded Mr Osborne attack on suppliers “over simplistic”, pointing out there was only a small link between oil prices and wholesale gas prices in the UK.
Energy UK, chief executive, Lawrence Slade said: “Energy suppliers are passing on price cuts to customers.
“When people shop around they can easily find deals that are over a hundred pounds cheaper than this time last year and in line with cuts in wholesale energy prices.”