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If gas prices have fallen, why haven't energy bills?
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10 April 2007
At least 23million households are still waiting for the savings to be passed on.
While wholesale gas costs have dropped by 50 per cent since June last year, energy bills, typically £1,000 a year, have failed to fall by a single pence.
Just two of the six energy giants, British Gas and Scottish and Southern Energy, have cut their prices.
Two others, Npower and Powergen, have announced plans to reduce bills, but they have delayed the cuts until April 30 when many families will have turned down their heating.
Consumer groups criticised the remaining two companies, EDF Energy and Scottish Power, for failing to cut prices at all.
A spokesman for Energywatch said: "They are always very quick to increase prices when their wholesale costs go up.
"But they are always rather slow to cut them when the wholesale prices come down.
"Even the companies which have cut their prices should have cut them more than they have."
British Gas had raised its bills five times since 2004 before finally cutting them last month.
For many pensioners on a tight budget, the inflation-busting rises have forced them to choose between heating and eating.
For hard-working families, the bills have created additional financial pressures at a time when they are dealing with rising mortgage payments and council tax.
The energy regulator Ofgem has threatened to investigate any firm which fails to cut bills if wholesale prices are dropping. Chief executive
Alistair Buchanan said: "If companies are tempted to keep some of the jam on their fingers, they might in effect be triggering us into having a look at what is going on."
Energywatch urged consumers to shop around to save themselves hundreds of pounds.
For example, an EDF customer in London is typically paying £942 a year for gas and electricity if they have a "dual fuel" deal.
Similar deals are available that would save them £200, according to price comparison website Simplyswitch.com.
A University of Warwick study into electricity prices between 1999 and 2006 confirms that bills do not fall as quickly as wholesale prices.
The report also reveals many people are "reluctant" to switch, even if they can save a lot of money by moving to a cheaper provider.
Yesterday EDF Energy and Scottish Power said they were still considering a price cut.
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