Profits show Powergen could afford further price cuts

10 May 2007
Energy suppliers spending less on wholesale energy should pass on the savings to customers, leading price comparison sites have said as Powergen's parent company E.ON reports rocketing earnings in the first quarter.

From 43 million euros in the first quarter of 2006, E.ON's earnings multiplied tenfold to reach 436 million in the first quarter of 2007.

These figures suggest falling wholesale prices have now put Powergen "in a strong position to cut its prices again", commented's energy product manager Tim Wolfenden.

Customers have seen their bills fall by only nine per cent this year in spite of 54 per cent price increases after January 2005 as wholesale prices rose,'s Karen Darby calculated.

"So far, none of the energy suppliers has reduced its prices by anywhere near the amount that they raised them in the preceding 12 months," she added.

Earlier this week, Powergen introduced three new single electricity, single gas and dual fuel products guaranteed to cost customers less than the British Gas standard price until September 2008.

But the under-selling guarantee does not apply to the prices set by any of Powergen's other four major UK competitors.

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