E.ON to cut gas prices for two million homes

Published 09th Mar 2010

E.ON became the third big UK energy company to trim its gas prices yesterday, with a 6 per cent reduction that will benefit 1.9 million British households.

The German-owned utility said that the cut would take effect from March 31, at the end of the period of peak winter demand.

The decrease will knock about £42 off the average annual gas bill for customers paying by monthly direct debit, leaving an average dual-fuel customer at E.ON paying £1,185 per year.

Ofgem, the regulator, and the Government have urged energy companies to cut residential bills to reflect lower wholesale prices.

Graham Bartlett, managing director of retail business, said that E.ON was aware of the problems that the cold winter and the recession had caused customers: “We are pleased to see the opportunity to now reduce prices.”

However, he added: “The fall in current wholesale prices is only part of the pricing story as our customers are using gas bought over a number of years at much higher prices than today.”

British Gas and Scottish and Southern Energy have already trimmed their gas prices this year.

Ian Parrett, energy analyst at Inenco, said that he expected a swift reaction from EDF Energy, ScottishPower and RWE npower — the remaining UK suppliers that have not yet cut prices this year — to stop customers leaving.

Mr Parrett said: “It only takes one or two companies to cut prices to start a price war and once that starts there is scope for significant reductions in bills. It’s likely that switching rates [among domestic customers] could rise quickly — the cold winter has left many people accurately aware of the price of energy.”

Source: ' Times '

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