Energy bill cuts 'disappointing'

Published on 24/01/2009 12:41

HOUSEHOLDERS hoping they would see sharp reductions to their energy bills following falling oil prices will have been disappointed with the announcement from Scottish Gas that it was slicing 10% off its tariff, and only for gas, not electricity, writes Teresa Hunter.

This is set against a background of numbing 43% rises in utilities last year, which saw the average annual cost of heating and lighting a home soar from 912 to 1,293, adding 4.3bn on to bills.

After Scottish Gas's announcement customers will be only 15 better off, according to energy price comparison experts uSwitch. Jo Ganley, a spokeswoman for uSwitch, said: "We are very disappointed. We were expecting both gas and electricity to be cut and by more than 10%. As the first company to move, this has set the pattern which the others will follow."

Scottish Gas, however, claims the reductions, which amount to 88 off costs for its average gas customers, will bring down a typical Scottish Gas dual fuel bill from 1,328 to 1,240. However, the average bill will still be 36% higher than a year ago.

Households are being urged to get to grips with their bills, and make sure they are paying the cheapest tariff. Switch with Which? claims consumers are missing out on an average 257 with only 15% changing supplier over the past 12 months.

Switching is easy via one of the comparison websites. You simply need current bills available so that your typical usage can be estimated. Paying by direct debit, switching to a dual fuel tariff or signing up online, can all cut your regular bills.

According to uSwitch, for an average user on a standard tariff, EDF Energy was the cheapest provider before Scottish Gas's announcement, and remains so despite the cut. At Scottish Gas, its cheapest tariff is the online "Websaver One".

Scottish Gas also operates a social tariff with very attractive prices for those on certain benefits including pension credit, but it was closed to new customers ahead of last year's price hike, just when it was desperately needed. However, a spokeswoman said the company was hoping to make this tariff available again shortly.

Anyone who signed up for a fixed tariff which guaranteed the price would not change will not benefit from the latest reductions. Scottish Power said that most customers locked into fixed deals before last year's price hike. However, uSwitch indicated that these deals had continued to be available, and that some customers could be trapped on eye-watering tariffs.

The most recent fixed Scottish Gas deal priced average bills at 1,428 annually. Customers are now stuck with this tariff until January 2012, unless they pay an exit penalty of 35 for gas and another 35 for electricity.

Ganley said: "These customers pay by direct debit, which should bring savings and yet does not."

A Scottish Gas spokeswoman said: "That is the nature of fixed deals, I am afraid. The price is fixed, regardless of what happens to other tariffs."