Energy News

EDF Energy cuts gas prices by 5%

Wednesday 11 January, 2012

By Martin Fagan

Following the fall in wholesale gas prices, EDF is the first major energy supplier to cut costs for consumers.

EDF Energy has announced it will cut gas prices by 5%, making it the first major energy supplier to lower prices this year.

The price cut will be on gas - not electricity - and will benefit 1.4 million of EDF Energy’s 3.8 million customers. The move, effective from 7 February, follows recent announcements of price cuts by smaller suppliers Co-operative Energy and Ovo Energy.

EDF said an average dual fuel customer with typical consumption paying by monthly direct debit will face a bill of £1,137 a year. The cost will be higher for EDF customers who have not switched to payment by direct debit.

The remaining five of the “big six” suppliers - British Gas, Npower, Scottish Power, Eon and SSE - will now be under pressure to reduce their prices, although independent switching service uSwitch.com says any reductions are “unlikely” to wipe out the £224 (21%) increase seen by households in 2011.

EDF Energy was the last of the major energy companies to raise its prices in November 2011 when it increased gas by 15% and electricity by 4.5%.

“This is an overdue but nonetheless welcome move,” said Adam Scorer, director of policy and external affairs at watchdog Consumer Focus.

“Wholesale prices are at their lowest point in almost a year and the trend is for them to fall further. Underlying market fundamentals - especially wholesale prices - should determine the price consumers pay. These fundamentals have clearly changed in the energy market and retailers should respond.”

Richard Lloyd, executive director at consumer champion Which?, added: “This gas price cut will be welcome news for millions of consumers with already squeezed household budgets. But it follows a hike of 15% last November. Now the pressure is on for the rest of the major suppliers to follow suit.”