Smaller gas and electricity firms' price war brings cheaper energy bills
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Version 0 of 1. A price war has broken out among the UK's smallest gas and electricity firms, sending domestic fuel bills to less than £1,000 for the first time in several years. An independent supplier, First Utility, has launched what it said was the country's lowest one-year, fixed-price, gas and electricity tariff – marginally undercutting a rival small supplier, Ovo, which itself dipped below the £1,000 barrier last week. The timing is surprising given the uncertainty in the gas market as a result of the unrest in the Ukraine. Analysts have suggested that this is evidence that the smaller rivals can now take on the big six energy firms. At £994 a year based on Ofgem's average medium consumption, First Utility's new iSave Fixed July 2015 tariff puts it top of the switching site comparison charts - for now. Last week Ovo launched what was then the first duel fuel tariff to break through the £1,000 barrier for the first time in years. Its Cheaper Energy Fixed tariff will cost an average household £998 a year, bucking the trend that has seen average bills move up to £1,264 a year. Currently, the smaller firms First Utility, Ovo, Spark and Flow Energy all occupy the top spots for offering the lowest tariffs, leading some experts to warn the independent firms are now a force to be reckoned with. Households can typically save £200 a year by moving from an averagely priced tariff to the very cheapest dealson offer. Clare Francis, of comparison website MoneySuperMarket said: "The move is another boost to cash strapped bill payers and is a welcome addition to the David and Goliath price war we have seen kick off recently. We are anticipating a lot of activity in the energy market over the next month with a number of fixed rate tariffs ending in the coming weeks. Because of this, thousands of people will, or should be, shopping around for a new deal and the launch of First Utility's new offering is a clear indication that they're trying to tempt the switchers their way." Ed Kamm, Chief Customer Officer of First Utility, which now has almost 400,000 customers in the UK said this was clear evidence there is active competition within the market. "It will be interesting to see if the larger suppliers choose to get involved." |