Could energy price cuts be on the way?

A consumer campaign group, Consumer Focus, has indicated that there could be energy price cuts on the way as a result of a fall in the cost of wholesale energy. This comes as a result of one of the major energy suppliers in the UK, Scottish and Southern, stating that it could see prices falling by early 2009 as a result of falling wholesale energy prices. With energy prices having rocketed twice this year any fall in prices will be welcomed by businesses and consumers, many of whom are struggling to keep up with bills.

An official from the energy firm, which has close to nine million customers, said: “If wholesale prices for electricity and gas maintain a downward trend, Scottish and Southern Energy is optimistic that it will be able to deliver reduction in prices for domestic customers during the early part of 2009.”

However, the firm added that there was usually quite a long period before any falls in wholesale energy prices were passed on to consumers.

An official from a price comparison site also warned: “The crippling price hikes that added an extra 42% or £381 onto the average household energy bills this year have yet to be played through into winter bills. Consumers need to be aware that the promise of a future price cut will not limit the impact of energy prices this winter, so they still need to take action now to protect themselves.”

The chief executive of Consumer Focus has called for swift action from suppliers in cutting energy prices. However, the Energy Retail Association said: “Consumer Focus has no evidence on which to raise consumers’ expectations that a cut in energy prices is possible. This is a simplification too far. There would need to be a sustained fall in wholesale gas prices before energy companies could consider any price changes.”

Tags: energy suppliers, wholesale energy, Wholesale, trend, energy companies, Association