Eon 3.3% cut in gas prices a 'nominal amount'

06 July 2009 / by Rachael Stiles

In response to the news that Eon has cut its gas prices by 3.3 per cent, energy industry experts are saying that while it is a move in the right direction, it does not go far enough.

The 3.3 per cent drop in gas prices - which came into affect at the weekend - is only a 'nominal amount', says Martin Lewis, founder of consumer revenge and comparison website MoneySavingExpert.com.

While Eon reduced its electricity prices by nine per cent earlier this year, Mr Lewis points to the fact that some of Eon's competitors have slashed their gas prices by 10 per cent, and says that the new price cut is too small.

Eon says that the price cut will benefit two thirds of its gas customers, 1.8million households, saving them around £35 a year.

Wholesale energy price have fallen by around 50 per cent in the last 12 months, Mr Lewis argues, while companies offer households only minimal reductions in their energy bills.

"As expected, energy prices continue to sneak downwards, though still far from what you’d expect after the cuts in wholesale energy prices," Mr Lewis said.

"It's important those who haven't done a comparison recently compare, ditch and switch to ensure they're on a decent tariff – as the savings can be in the £100s.

And, he added, Eon customers should not assume that the price cut means they getting the best energy prices. "Doing a comparison is just as important for them as anyone else," Mr Lewis said.

Gareth Kloet, head of utilities at Confused.com, says that while the price cut is a "welcome move" for EON's gas customers, "it's just a drop in the ocean."

"It's about £2 less each month for customers using an average amount of gas, so it's not going to make a huge difference to consumers struggling with their household budgets," he said.

"Our message is simple: if customers want to make larger savings, they need to take matters into their own hands and choose a supplier and tariff that rewards them for their custom. In some cases, they may not even need to switch supplier; simply moving to an online dual fuel tariff and paying by direct debit can bring substantially better savings."

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