The market price of UK gas has plummeted to costs seen back in 2010 as pressure is mounting to reduce energy bills. Wholesale gas averaged 47.1 pence per therm, the lowest quarterly average since Q1 2010.
The falling oil price down to US fracking and reduced demand in Asia is seen to be a contributing factor with a currency impact from the Greek EU exit also to be included.
While experts state that the price of winter gas is now almost as low as it can go, some believe energy companies will continue to charge customers the same rate for their retail gas tariffs.
“Why on earth are hard-pressed consumers not seeing the full benefits of lower wholesale prices?”
demanded Uswitch director of consumer policy Ann Robinson.
Oh Ann…you are the weakest link. Must we educate you?
Never fear though as Energy UK chief executive Lawrence Slade was on hand to clear things up.
He defended energy suppliers, saying that:
“Wholesale costs are only part of energy bills so cost reductions are never able to be exactly in line.”
Quite right Mr Slade. We commend you on your well-informed position. We’ve being trying to articulate the same sentiments ourselves here at Business Juice.
Wholesale costs make up just 35% of the overall energy bill with other large percentages owing to government taxes and levies. We explain why bills aren’t dropping in line with wholesale prices.
Plus, energy companies buy much of their energy from the wholesale market between 6 months to 2 years ahead of delivery to end-consumers, so current customer bills are based on market costs incurred before the heavy losses on global energy markets.
“Energy companies are bringing down prices across all their tariffs as fast as possible so customers should use any of the many switching sites to check they are on the right deal for them,” Slade added.
Despite those supporting suppliers, pressure is still being applied to the big six after energy secretary Amber Rudd has continued to rally against high energy prices.
We think that consumers need to step up a little themselves and look for better contracts. There are lots of great energy deals to be snapped up out there – you just need to look for them.
Or why not let us do it for you? We’ll compare over 25 suppliers to get you the best deal for your business. Call 0800 051 5770.