Scottish Power to cut cost of gas on fixed price energy plan by 10%

Scottish Power's announcement that it is cutting the cost of gas on its PriceSure fixed price energy plans by 10% could be the biggest hint yet about the level of price cuts consumers can expect from energy suppliers during the first quarter of 2009, says uSwitch.com.

Will Marples, energy expert at uSwitch.com, says: "What consumers must understand is that energy price cuts are likely to be too little and too late to help them with this winter's fuel bills. We expect suppliers to take a cautious approach to bringing household energy prices down. They will be concerned that wholesale prices could move upwards again, eating into margins and leaving them exposed. To mitigate this risk, they are likely to opt to introduce cuts in two stages, making an initial reduction of 10 - 15% in the run up to Spring 2009, followed by a second cut of a similar or smaller level later on in the year if wholesale prices remain low.

"Today's move is significant only in that it gives the biggest hint we've had so far of the level of energy price cuts consumers can expect in early 2009. If a 10% cut was applied to both gas and electricity it would shave £129 off the current average bill of £1,293, taking it down to £1,164. However, this would still leave bills £252 or 28% higher than the average £912 households were paying at the beginning of 2008.

"The prospect of £129 coming off the average household energy bill within the next few months is welcome, but moving to a competitive energy plan could save up to £350. More importantly, this is something consumers can do for themselves today."

Scottish Power's 10% cut on gas prices alone on its PriceSure fixed price energy plans today will see the average bill come down by £81 from £1,210 to £1,129. Because it is a fixed price plan, the price cut is only expected to benefit a relatively low number of customers.