21st Jan 2015 14:44
LONDON (Alliance News) - Scottish Power Ltd, part of the Iberdola Group, Tuesday became the latest energy provider to pass on the reduction in wholesale gas prices on to its customers.
Scottish Power will reduce domestic gas prices by 4.8% for its customers from February 20, and is launching a new fixed-price tariff that has an "average dual fuel bill of GBP930," it said in a statement.
The reduction is the fourth by a so-called Big Six energy firm.
British Gas, part of Centrica PLC, announced it would cut its customers' average energy bills by 5% from February 27, while E.ON is to slash its standard gas price by 3.5% of annual gas bills. nPower also said it would be reducing customer bills by an average of GBP33 per year across both gas and electricity for those who saw an increase in their bill during December 2014.
Scottish Power has also said its average annual gas bill will fall by GBP33 per year on its standard tariff.
The other members of the Big Six are EDF Energy and SSE PLC, which are both expected to make similar cuts in the near future.
"Today?s decision has been made to benefit our customers and keep our prices competitive. We will continue to keep our prices under review," said Scottish Power.
"The wholesale price of energy accounts for half of a customer?s gas bill, but non-energy costs such as transmission and distribution networks and environmental and social obligations remain unaffected by any wholesale energy price movements," added the energy firm.
Scottish Power said for every GBP100 spent by a typical gas customer, GBP51 is made up of wholesale energy costs, GBP24 goes towards the delivery to the customer's door. whilst GBP12 is put toward customer service. The remaining balance is put toward environmental obligations, VAT and GBP3 is profit for the company.
Centrica shares were up 0.5% to 267.90 pence per share on Wednesday afternoon, while SSE shares dropped 0.3% to 1,500.00 pence per share.
By Joshua Warner; [email protected]; @JoshAlliance
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