Energy companies unlikely to cut prices anytime soon

12 January 2015

energy It's looking unlikely that any Britain's energy retailers are going to offer any price cuts before the General Election.

This is to give a reality check and throws general shade at the various political parties, and their flimsy promises on energy price freezes, such as Miliband's claim that Labour would impose a 20-month price freeze.

According to Sky News, several major suppliers will tell ministers that the timeframe horizons which they set tariffs render a pre-election cut "illogical and impractical" despite the falling oil price and declining cost of wholesale gas.

While they're about it, they plan to respond to a letter from Matthew Hancock, the Business, Energy and Enterprise Minister, who wrote to the six companies this weekend to demand that prices should be slashed.

As well as wishing them a Happy New Year, highlights of his missive see him saying: "Wholesale gas prices have been falling for months, and are now 30% lower than this time last year."

"In a competitive market, I would have expected energy suppliers to cut bills as a result of these low wholesale prices. Independent suppliers have done precisely this. However, larger energy suppliers have failed to cut prices across all their tariffs"

The big six energy companies - British Gas, EDF Energy, EON, Npower, Scottish Power and SSE - have said that Miliband's pledge could make it commercially risky to cut prices.

According to an unnamed executive - so we'll christen him as Mr Biscuits for this exercise - at one of the energy companies "We are taking pricing decisions now that may have to last for two years. Anything could happen to wholesale prices during that period which would make supplying energy at lower levels than today wholly uneconomic."

Downing Street sources said on Saturday that Hancock's letter had been approved by both the Prime Minister and the Chancellor.

George Osborne this week vowed to watch utilities and fuel retailers "like a hawk" (which you could imagine, because he looks mildly inhuman anyway) to ensure that the benefits of lower oil prices were being passed on to consumers.

It seems like the whole cost of living thing is going to be a key part of the election campaign, which would be nice, seeing as everything has become unaffordable and ridiculous.

TOPICS:   Utilities

1 comment

  • bob
    well that proved to be wrong within 24 hours!

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