12th Feb 2016 16:07
LONDON (Alliance News) - Good Energy Group PLC Friday said it will reduce its gas prices by more than 7% from the start of April as the company decided to make deeper cuts than the Big Six energy suppliers.
The UK energy market has been under pressure to cut prices for consumers after wholesale prices fell, and Good Energy said its 7.2% cut to its gas prices will help its customers save more money per year than customers of the Big Six energy suppliers.
"For the average dual fuel user, this equates to a saving of around GBP42 off their annual bill compared to the GBP32 average saving the 'Big Six' are offering through their gas price reductions," said Good Energy.
All of the Big Six energy companies have eventually made cuts to their domestic prices in 2015. E.ON was the first big supplier to cut its prices, with the other five then following suit.
The Big Six is comprised of E.ON, EDF Energy, Scottish Power, nPower and London-listed SSE PLC and British Gas, which is owned by Centrica PLC.
All of them cut their tariffs by roughly the same amount, an average of only 5% according to price comparison service uSwitch. SSE cut its prices by 5.3% whilst British Gas slashed its prices by 5.1%.
The Big Six and the rest of the market were under pressure to cut prices to reflect the fall in wholesale has prices - but the cuts have been criticised.
uSwitch said the average 5% cut to tariffs is not enough compared to the fall in wholesale gas prices and has also criticised the fact the price cuts are only being introduced now, well after winter has finished when bills tend to soar due to the weather.
Regulator Ofgem has previously said wholesale gas prices fell by around a third over the last 12 to 18 months - with wholesale gas prices contributing around half of a domestic bill paid by customers.
The deeper cut to prices made by Good Energy could be a concern to the Big Six as they have increased in numbers and began breaking the stranglehold the big players have on the market by steadily increasing their market share.
In the middle of 2015, independent suppliers, of which there are roughly around 22, had a collective market share of around 14%, and they acquired more new energy accounts in the three months ended July 31 than they held in total four years ago.
The reduction only applies to standard variable tariff customers and not to customers on a fixed tariff, but will be made available to existing and new domestic customers, Good Energy said.
"Today's announcement further strengthens our competitive pricing, 100% renewable electricity and award-winning customer service proposition to new and existing customers," said Juliet Davenport, founder and chief executive of the renewable electricity supplier and generator.
Good Energy shares were down 1.9% to 185.0 pence per share on Friday afternoon.
By Joshua Warner; [email protected]; @JoshAlliance
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