Watchdog wants bills cut in winter

A consumer watchdog has stated that energy bills must be cut by the UK’s energy giants for the winter, stating that the fall in oil prices over recent months warrants a fall in energy prices.

Both the government and consumer campaigners have said that energy companies need to start reducing the cost of gas and electricity usage over the coming weeks, as the cost per barrel of oil has fallen by close to 50% since the summer. Petrol companies have already slashed petrol prices since the price of oil came down, although the price cuts did take some time to filter through.

A senior official from the watchdog group Consumer Focus said: ‘Energy companies all put their prices up, arguing-that it was down to rising costs of oil and gas, but now that is reversed we are seeing delay, blather and procrastination. We believe that consumer prices need to come down with no ifs and buts over the coming weeks.’

Another official said that if there was increased competition amongst suppliers the average household bill could be cut by around £300 to £400 a year. He added that the six major energy suppliers in the UK needed to be referred to the Competition Commission to ensure that there was adequate competition for consumers to benefit from more affordable prices.

Officials from the energy industry have said that whilst oil prices have come down the cost of wholesale energy is still expensive, and therefore energy prices remain high. Another said that energy prices did not have that far to fall because they did not rise in line with crude oil prices.

One official from the Energy Retailers Association, said: ‘As gas is bought through long- and short -term contracts on the wholesale market, there is always a time lag between when the wholesale price rises or falls and when customers’ domestic bills rise or fall.’