The ‘Big 6’ energy suppliers look set to be left behind in the energy price war as smaller utility companies begin to take advantage of cheaper wholesale gas and electricity prices and spark and energy comparison war.
Within the past 2 weeks OVO Energy, with their ‘New Energy’ tariff, and now First:Utility, with their ‘iSave’ tariff, have become the cheapest duel fuel energy supplier in the UK for an average sized household choosing to pay by monthly direct debit.
The wholesale price of gas has fallen dramatically over the past year, according to ICIS Heren the cost per therm between 1st April and 24th August 2008 was 58.47p, for the same period in 2009 it is 25.5p per therm. Although there is a ‘lag’ of when gas is purchased and how prices are decided of around 6 months, the news that smaller utility providers are being able to significantly undercut the bigger players highlights that there needs to be further cuts in utility prices.
Unusually for ICIS Heren, who have in the past disagreed with the methodology and statements that Consumer Focus have used regarding how much customers are being overcharged (a recent figure suggested an average household was being over charged by £100 per annum) they agree that the ‘Big 6’ could pass on more savings to consumers, especially as future wholesale charges look set to fall even further.
Consumers are still looking set for a difficult winter with unemployment at a record high and VAT set to rise (not to mention other areas such as fuel duty) and with a lack of intervention to force the major energy providers to lower their tariffs, now is an especially good time to think about changing energy suppliers.
