Big price gap opens up in the energy market

A big price gap has opened up between those suppliers who have announced or implemented price cuts and the two smallest suppliers, who have yet to make any announcement, according to research by energy regulator Ofgem.

Dual fuel customers with EDF Energy could save up £140 and those with Scottish Power could save up to £122 if they switched to another supplier. (This excludes customers on a fixed price tariff.)

Customers switched at the highest rate for four years in 2006 with over four million changing supplier. This trend is increasing with over 100,000 more people switching in January and February this year than in 2006.

Ofgem Chief Executive, Alistair Buchanan, said: “New switching figures published by Ofgem today confirm that Britain’s energy market remains highly competitive. Our research also shows that a big price gap has opened up leaving EDF Energy and Scottish Power customers paying over £100 for remaining loyal.

“Competition is all about customer power – in a market where over 600,000 customers switched in the first two months of this year any supplier that tries to buck the market by not lowering their prices or failing on service risks an exodus of customers.”

Customers need to shop around to get the best deal, as the other four suppliers do not all charge the same prices. Even if a supplier has announced price cuts customers may still be able to get a better deal by switching to a competing supplier.

Other ways Energy Smart customers can save money include:

using energy more efficiently – energy saving measures, like loft insulation, can knock £££s of your bills

getting both your gas and electricity from the same supplier as a dual fuel deal

moving from paying by cheque to Direct Debit can save £35-40 a year, and
managing your energy supply online – some of the best deals are now available
for online accounts

Customers should also think about what type of deal is right for them. There are a range of new products – green tariffs, online tariffs and fixed and capped rate deals.

Commenting on Ofgem’s decision to name and shame suppliers who fail to pass on savings to their customers, Paul Schofield, head of utilities at moneysupermarket.com, said: “Wholesale gas prices began to fall last year.

“The delays we have seen in reducing energy prices from certain suppliers has been indefensible given that wholesale gas prices began to fall last year"

“We echo Ofgem’s calls for consumers to shop around.

"By remaining on a dual fuel tariff but opting to manage their account 'Online', 'Standard' tariff Scottish Power and EDF customers could save an average of 14 per cent on their energy bills or £130 a year.”