Scottish power has become the last of the ‘big six’ energy providers to reveal cuts to the price of its fuel, with the announcement that it will reduce the cost of gas by five percent from February 27.
Each of the main energy providers in the UK has either cut the cost of gas or electricity in 2012. However, none of the ‘big six’ have announced a cut to both electricity and gas. The fall in price reflects the decreasing wholesale cost of energy, which has fallen by over 25 percent due to energy companies wrongly anticipating a harsh winter and overstocking on energy.
Consumers are being urged to keep the newly-announced price cuts in perspective, after every one of the ‘big six’ increased gas prices by between 15 and 20 percent between August and November 2011 and four of the six raised the cost of electricity by over ten percent.
Paul Steedman, Energy Campaigner for Friends of the Earth, said: “Tinkering in the margins of massive price hikes won't fix our broken energy system – the ‘big six’ are making billions in profits from their addiction to fossil fuels, whose yo-yoing prices make it hard for families to budget.”
Scottish Power warned that rising demand for energy would “inevitably lead to higher energy costs in the long term”.
Neil Clitheroe, ScottishPower’s CEO of Energy Retail and Generation, said: “In October, we pledged not to increase standard prices for gas and electricity over the winter months, extending until at least April 1, 2012. Today’s reduction is being made as part of our commitment to continually review our tariffs.
“Although there has been a short-term fluctuation in the wholesale gas market that has allowed us to pass on today’s reductions, the global demand for energy is increasing faster than its supply. This will inevitably lead to higher energy costs in the long-term.”
The news of the price cuts come after a recent Which? survey revealed that consumers are becoming increasingly frustrated with the service provided by the ‘big six’. According to Which? four million complaints were received last year by the big six, and tens of thousands of these issues remained unresolved after eight weeks.
Which? Executive Director Richard Lloyd says: “These findings reveal shockingly high levels of complaints and low levels of customer satisfaction in the energy industry, at a time when domestic bills have gone through the roof. Ofgem, the regulator, should publish the truth about the full level of complaints in this essential service. Energy suppliers should be held publicly accountable, on a regular basis, for putting right the problems their customers are reporting.”