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Energy bills to fall by £100 in the wake of oil price collapse
Jonathan Prynn, Consumer Affairs Editor10 Nov 2008
ENERGY bills are set to fall by around £100 next year as a result of collapsing wholesale gas and electricity prices.
Consumers can expect to see £80 to £90 come off their gas bills and up to £25 cut from electricity for the year, according to the latest forecast.
It follows two years of rocketing prices that have added almost £400 to the typical cost of heating and lighting homes - almost £1,200.
Britain's "big six" energy suppliers - British Gas, EdF, npower, E.on, Scottish Power and Scottish & Southern - are now having to pay far less for the gas and electricity that they buy in the wake of the collapse in the price of oil.
In sterling terms, oil is now less than half the price of July's peak, when it hit $147 a barrel. Wholesale gas prices are 33 per cent of their peak and electricity is down 28 per cent. These falls should be passed on within the next six months.
Any price drop will ease some of the pressure on households struggling to cope with the spiralling price of essentials and help bring down inflation.
Prices were rising at 5.2 per cent a year in September but the rate is expected to collapse next year as the economy slides into its first recession since the early Nineties.
Joe Malinowski, founder of energy price comparison website TheEnergyShop.com, which did the research, said: "At current wholesale prices we can look forward to standard energy bills being around £100 lower in the spring of 2009 compared with current levels. Unfortunately most consumers will barely notice the difference particularly when compared with the average increase of £370 we saw in 2008."
The encroaching recession also brought a small glimmer of hope for Christmas shoppers, who are set to spend a record £13.16 billion online in the run-up to the festive season.
Analysts today predicted internet retailers will have to cut their prices in the face of slowing growth in web sales, prompting a rush for bargains.
E-commerce retailers' organisation IMRG said: "Retailers and suppliers will be under extreme pressure to price competitively this year, so there will be a lot of volatility out there - and fantastic bargains. The internet enables canny shoppers to find and grab [a bargain] before anyone else gets the chance."
Reader views (3)
Gordon Brown might try to cadge popularity by calling for petrol prices to go down (which ironically would reverse his own increases in the fuel tax take ?).
But he has a blind eye to how the majority are being ripped off by the power companies.
- Rebecca, London, 10/11/2008 19:20
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The british are being ripped off by these energy companies, we pay more than the europeons, the govenment does noting to reduce or cap these prices.
- Maggie, London, 10/11/2008 15:50
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Aye, right, as they say in Scotland. I'll believe it when I stop getting asked for more and more money each quarter, even when I use less fuel...
- Nobby Clark, Perth, Scotland, 10/11/2008 15:14
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