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Energy firms accused of 'token' cuts in the price of gas | |
(about 3 hours later) | |
Energy firms are being accused of "token price cuts" and failing to pass on larger savings to their customers. | |
Citizens Advice said people could save up to 25% off bills by switching from a standard rate tariff to a fixed rate. | |
The regulator Ofgem said some households could save as much as £250 a year by moving to a fixed-rate. | |
It comes after Npower said it will cut gas prices by 5.1% from 16th February, and would consider more reductions if wholesale prices fall further. | |
It will mean the average customer on a standard - or variable rate - tariff will save around £35 a year. | |
Four of the big six suppliers have now cut their charges in the last two weeks. | |
'£266 a year' | |
But consumer groups said some of the energy companies are not treating customers fairly. | |
"Energy firms are engaging in a phoney price war," said Gillian Guy, the chief executive of Citizens Advice. | |
"Token energy price cuts to standard tariffs do not reflect the big savings that energy firms can pass on to households." | |
The regulator, Ofgem, also advised consumers to consider fixed-term tariffs. | |
"While recent price cuts are a step in the right direction, many customers could be better off to the tune of up to £250 by moving from a variable rate to a fixed rate deal," said Dermot Nolan, Ofgem's chief executive. | "While recent price cuts are a step in the right direction, many customers could be better off to the tune of up to £250 by moving from a variable rate to a fixed rate deal," said Dermot Nolan, Ofgem's chief executive. |
One price comparison site put the potential savings even higher. | One price comparison site put the potential savings even higher. |
MoneySuperMarket said customers could save up to £266 a year by moving to the cheapest fixed-rate deal. | MoneySuperMarket said customers could save up to £266 a year by moving to the cheapest fixed-rate deal. |
However several of the big six suppliers said they went out of their way to publicize their best-value tariffs. | |
"As well as including details on our cheapest tariff on all of our bills - we are also one of the only energy suppliers who have actively targeted our own customers who have never switched to encourage them to find cheaper deals," said a spokesman for Scottish Power. | |
Npower's is the largest cut announced by a supplier so far, following a significant fall in wholesale gas prices since the Autumn. | |
British Gas, E.On and Scottish Power have all announced price cuts within the last couple of weeks, as a result of falling wholesale prices. | |
But the suppliers argue that the wholesale price only makes up around half an ordinary gas bill. | But the suppliers argue that the wholesale price only makes up around half an ordinary gas bill. |
"If there are further falls in wholesale prices, we will keep these under review to see if we can cut further," said Npower chief executive Paul Massara. | "If there are further falls in wholesale prices, we will keep these under review to see if we can cut further," said Npower chief executive Paul Massara. |