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Power bills must be cut soon demands watchdog
Jonathan Prynn, Consumer Affairs Editor21 Oct 2008
ENERGY companies are coming under huge pressure to cut bills this winter following the recent dramatic fall in oil prices.
In a two-pronged attack, the Government and consumer watchdogs said gas and electricity bills need to start coming down within weeks.
The criticism comes after petrol retailers announced a series of cuts in the price of fuel that has taken it down to levels not seen since last year.
However, there are no signs yet that the "Big Six" household energy companies British Gas, EDF, Scottish Power, Scottish & Southern Energy, npower and Eon are ready to follow suit.
Ed Mayo, chief executive of watchdog Consumer Focus, said: "Energy companies all put their prices up, arguing that it was down to rising costs of oil and gas, but now that is reversed we are seeing delay, blather and procrastination. We believe that consumer prices need to come down with no ifs and buts over the coming weeks."
In a separate attack, the former head of the Energywatch consumer group said household bills could be cut by £300-£400 a year, from an average level of around £1,200, with more vigorous competition between suppliers.
Allan Asher told BBC Radio's File on 4 that the Big Six should be referred to the Competition Commission.
Fears of a global recession have sent the oil price plummeting since it peaked at $147 a barrel in July. Today it was trading at only just over half that level at around $75. Wholesale gas prices have fallen by more than a quarter from a high of £1 a therm in August to around 72p a therm, but no company has cut household tariffs.
The suppliers all pushed through huge increases in tariffs of up to a third earlier in the year, sending the typical household bill spiralling.
A spokesman for Gordon Brown said: "What we have seen is prices going up for fuel and energy when the oil price went up and now that the oil price has come down, the public would naturally expect retail prices for fuel and household energy to come down as well."
Ed Miliband, the new Energy Secretary, last week met bosses from the major suppliers to stress the Government's expectation that prices will fall significantly. However, the energy industry has dampened hopes that the prices will start to come down soon as suppliers are already locked into expensive contracts over the winter.
Garry Felgate, chief executive of the Energy Retailers Association, said: "As gas is bought through long- and short -term contracts on the wholesale market, there is always a time lag between when the wholesale price rises or falls and when customers' domestic bills rise or fall."
A spokesman for Centrica, which owns British Gas, said: "It is welcome that wholesale gas prices are falling but they remain very much higher than last winter and that is a key issue facing the whole of the industry."
Reader views (4)
Why when we are aware that Gas companies gave away gas last year to accommodate new supplies in their storage did it not reflect in prices for poorer and pensioners getting reductions on their fuel bills,or even price reductions across the board instead of more increases. Can the public take much more.
- Jean West Midlands, West Midlands En gland, 01/04/2009 18:30
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The moment there's the slightest suspicion that an election is in the offing, this tacky government will suddenly find the powers to force the power prices down.
The mere threat that they might have to start working for their livings will produce the desired effect.
- L.Taubler, London / UK, 21/10/2008 22:02
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Why on earth does the Government and the Consumer Watchdogs need to get involved in the first place?
In this time of uncertainty, general consumer spending doubts and high utility prices...Utility prices should be lowered automatically without any intervention from outside sources? Or are these organizations just buying time and riding the wave of big bonuses as long as they can?
- Phil, London, UK, 21/10/2008 18:50
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Why on earth can't we have our fireplaces back...as a council tenant I can't put one in myself...it's really bad that a domestic user who after being out of their home for 8 - 9 hrs a day working has to keep footing the huge bills that are imposed on them. These firms should be made to cover the increases with their bonus.
- Sarah, London, UK., 21/10/2008 12:10
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