EDF Energy has become the last of the big six energy firms to cut prices for its 1 million customers – but it is cutting gas bills by just 1.3% – the smallest cut of any of the major suppliers.
The company said the cut in its standard variable gas price will take effect on 11 February, and that its average gas customer will save just £9 a year.
Wholesale gas prices have fallen by 30% in the last year, and consumer groups say the energy firms would have to cut bills by around £140 a year to pass on the wholesale savings in full.
The company defended the paltry 1.3% price reduction claiming that the vast majority of gas EDF bought for its customers was purchased well in advance and at higher prices. It also said its standard dual fuel prices have been the cheapest of the major suppliers for 143 weeks during the past three years.
Beatrice Bigois, managing director of customers at EDF, said: “EDF Energy has a strong track record of acting independently in the interests of customers who have benefited from the best standard variable prices for the majority of the last three years, in comparison to other major suppliers. Today’s price cut means our standard tariffs will continue to be among the most competitive in the market. At the same time, one and a half million customers are benefiting from fixed price deals with no exit fees.”
If wholesale gas costs continue to fall in the coming months allowing further price reductions, EDF will pass these on to customers as soon as possible, she said.
News of the £9 a year cut will only further calls for the regulators to get to grips with the power firms that are quick to raise prices when wholesale costs rise but slow to act when the price falls. Citizens Advice has branded the cuts as a “phoney price war”.
On Monday SSE said it would lower gas prices by 4.1% but not until 30 April. On Friday, npower announced it would reduce household gas prices by 5.1% from 16 February.
Ann Robinson, a director at uSwitch.com, says: “With the final price cut announced, it’s now official that standard tariff customers simply aren’t getting a fair deal. These meagre reductions are too little too late and must be increased to help hard-pressed consumers struggling with their energy bills this winter.”
On Tuesday Dermot Nolan, chief executive of Ofgem, told MPs the watchdog’s monthly supply market indicator report on Thursday would show that energy providers’ profit margins were widening as a result of the falling price of wholesale gas.
Energy giants are now even more disliked than banks, according to a Guardian/ICM survey, published on Monday.
