Scottish and Southern Energy second supplier to cut prices

There is more good news for consumers today as Britain's second biggest energy supplier, Scottish and Southern Energy, has announced that it is cutting prices. The reductions - 4% or £32 for gas and 9% or £44 for electricity - come into effect on 30th March. It means that the average Scottish and Southern Energy dual fuel bill will drop from £1,259 to £1,193.

The move follows British Gas' announcement on 22nd January that it is cutting the cost of gas for its customers on the 19th February by 10%, shaving £88 off bills.

However, those hoping that last year's price rises would be wiped out will be disappointed. Scottish and Southern Energy increased its prices by 44% or £384 during 2008. Its average household energy bill at the beginning of 2008 was £875. After today's cuts it will be £1,193 - £318 or 36% higher than a year ago.

In total, suppliers increased prices by 42% or £381 last year, adding £4.3 billion onto household bills.

Price cuts are now looking increasingly unlikely to help households struggling to keep warm through current arctic conditions. The UK last saw such cold weather in 1991 when the average household was spending £569 a year to keep warm. Today, however, households are facing an annual average fuel bill of £1,267 a year. And with around 5.4 million households living in fuel poverty, many people will be worried about the cost of keeping warm.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "Lower wholesale energy prices are now slowly but surely drip feeding through to lower household energy bills. The only question mark remaining is over how low suppliers will go and whether consumers are going to be left feeling empty handed.

"What is becoming clear is that price cuts early in 2009 are not even going to dent the surface of the 42% or £381 hike in household energy bills we saw last year. The most consumers can hope for is a small cut now to help with this winter's heavy fuel bills. And, if the market remains on an even keel, suppliers may feel confident enough to cut prices again later on in the year which will help with next winter.

"Consumers will be wondering where this leaves them. If you have never switched before, or are sitting on an uncompetitive standard plan, my advice would be to give yourself a price cut today. Move to dual fuel, pay by direct debit and sign up to an online plan so that you can enjoy lower prices straight away. Switching to a competitive plan could cut your energy bill by up to £350."