Lower energy cap to cut £80 off average bill
WATCHDOGS will cut the energy price cap today, reducing typical annual gas and electricity bills by up to £80 a year.
However, experts warn that the new tariff, which could fall to £1,174 a year for the average user, will still leave millions paying much more than they need to.
The cap was introduced in January to protect customers struggling on a ripoff standard variable tariff (SVT).
The measure forced the Big Six – British Gas, SSE, EDF, Eon, Npower and Scottish Power – to cut the cost of energy for the 15 million households on an SVT.
But they could have saved more by moving to a fixed rate deal. The cheapest such dual fuel tariff costs around £951, a saving of more than £200 on the lower cap to be set this morning.
The regulator Ofgem decides the maximum price per unit based on changes in the wholesale cost. The lower figure will come in on October 1 and last all winter.
Energy industry watchers say falls in wholesale prices in recent months should – in theory – lead to a fall in the Ofgem cap of £60-£80.
A gas glut has seen British and Dutch gas prices halve since September, after a liquefied natural gas influx shipped by tanker, and gas from Russia and the US.
Lily Green from price comparison site Look After My Bills says that 11 energy suppliers will have to cut tariffs and that customers have been paying a loyalty penalty of hundreds of pounds a year.
‘The price drop should have come a lot sooner... You can’t trust suppliers to lower your energy bill,’ she said.