ScottishPower has cut the cost of gas on its fixed price energy plan by 10 per cent, but if this is the shape of the price cuts to come from the energy companies, as they have promised, then uSwitch.com says it won't be enough to help struggling households.
The new PriceSure fixed price energy tariff from ScottishPower
could be an indication of what could be expected from other energy companies in terms of the price cuts to come as the price of oil continues to fall, uSwitch.com predicts.
But this could be "too little and too late" to help consumers with this winter's fuel bills, commented Will Marples, energy expert at uSwitch.com.
"We expect suppliers to take a cautious approach to bringing household energy prices down. They will be concerned that wholesale prices could move upwards again, eating into margins and leaving them exposed." Mr Marples said.
"To mitigate this risk, they are likely to opt to introduce cuts in two stages, making an initial reduction of 10 - 15 per cent in the run up to Spring 2009, followed by a second cut of a similar or smaller level later on in the year if wholesale prices remain low."
While today's move from ScottishPower
is "significant", he continued, because it provides consumers with the biggest hint yet as to what they can expect from their fuel bills
over the coming months, if other gas and electricity providers
follow suit with similarly small cuts "this would still leave bills £252 or 28 per cent higher than the average £912 households were paying at the beginning of 2008".
The 10 per cent reduction off the average cost charged by the rest of the industry represents a saving of £81 off the average customers' ScottishPower fixed tariff bill, and it is only expected to benefit a small percentage of ScottishPower customers because it only affects those on fixed price plans.
If the wider market makes the same price cuts, this will amount to an annual saving of £129 for the average household gas and electricity
bill, taking it down to £1,164 a year.
"The prospect of £129 coming off the average household energy bill within the next few months is welcome, but moving to a competitive energy plan could save up to £350." Mr Marples concluded. "More importantly, this is something consumers can do for themselves today."Compare gas and electricity prices »
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