UK Retailers Cut Gas Bills by 5%

UK energy retailer Scottish & Southern Energy will reduce the domestic gas prices on its standard tariff in Great Britain by an average of 5.3%, effective from March 29, it said January 28. The week before, a competitor, E.On, said it would cut gas prices by 5.1%. Electricity prices remain untouched.

SSE said the cut, the third in a row, demonstrated its commitment to "getting prices as low as possible" and to fighting for customers "in a fiercely competitive market."

In justification for the small percentage cut relative to the fall in wholesale prices this year, SSE said that wholesale energy prices "accounted for an ever-smaller proportion of the bill."

This though did not appear to satisfy the energy regulator Ofgem. CEO Dermot Nolan said: "This is a move in the right direction, but if the market is as competitive as suppliers claim we would expect to see further price cuts. Ofgem referred the market to the CMA because we feel competition is not bearing down fast or hard enough on consumers bills."

The Competition & Markets Authority had been expected to take a provisional decision on remedies in January but the new date now is March. June this year is the statutory deadline. Six big retailers account for the overwhelming majority of the market, and while Ofgem encourages households to switch their supplier, for many the savings to be made do not seem to justify the effort involved.

William Powell