Energy wholesale costs fall - will we see a drop in bills?

13 April 2016

energy bills Everyone knows that people in the UK are paying too much for their energy bills, and even though consumers are switching energy companies more frequently, there's still a feeling that the whole industry is akin to choosing which colour of shoe you'd like to kick you up the rear.

New figures show that wholesale energy costs are at the lowest they've been for a decade, which is going to see more calls for bills to be lowered, and the energy companies to pass their savings on.

This is according to the ICIS Power Index, who say that the cost of electricity is at a nine-year low, and the cost of gas is the lowest it has been for ten years.

Oil prices have also found themselves at a low (around $28 per barrel earlier this year), which also have sway on gas prices.

The Big Six have dropped gas bills by 5%, but electricity charges have remained largely static. No-one is holding their breath that the big energy companies are going to do anything about it, but the pressure on them is increasing.

Ann Robinson, over at uSwitch, isn't happy, saying that everyone's being "short-changed by token gesture price cuts", adding: "Given record-low wholesale costs, suppliers must do the right thing and reduce standard tariffs by a further 10%."

Of course, the energy industry have their excuses at the ready, and say that wholesale costs only make up 45% of a typical dual fuel bill, and that suppliers buy power two years in advance, so what they're paying now doesn't always reflect what they are charging currently.

Will we see them passing savings on in two years? Hands up if you trust them to do anything of the sort, when the time comes.

TOPICS:   Utilities

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