Now SSE cuts energy, but again by a paltry 5% and only on gas

Energy giant SSE has become the latest of the Big Six firms to cut gas prices for consumers, following similar moves by British Gas last summer and E.on from the beginning of February.

The firm will reduce domestic gas prices in Great Britain by an average of 5.3 per cent on its standard tariff from 29 March.

Last week E.on announced a domestic gas price reduction of 5.1 per cent to start on 1 February.

But the move led to widescale complaints that the big six energy firms have been overcharging consumers in the face of falling wholesale prices, which fell 23 per cent last year. SEE’s announcement has been met with similar opprobrium.

“Baaaah. SSE has bleated and followed Eon’s price cut last week, the rest of the big six sheep will likely soon follow,” blasted Moneysavingexpert Martin Lewis. “And again it’s just a trivial 5 per cent on gas only not electricity, nothing close to the drop in wholesale prices.”

Wholesale prices have hit a five year low which led to accusations that energy firms are overcharging by as much as £300 a year.

Earlier this month Ofgem chief Dermot Nolan admitted: “The market is not working as competitively as it should be … I think [energy companies] are overcharging in many cases.”

But the Energy Secretary Amber Rudd have SSE’s price reduction a cautious welcome. “I’m absolutely clear that the market must provide a fair deal for consumers and that’s why I’ve been pressing energy companies to put their customers first and pass on savings to them,” she said. “SSE has taken a step in the right direction and I urge other suppliers to follow suit.”

The other of the Big Six firms – EDF, Npower and Scottish Power – are almost certainly set to follow with similar announcements soon.

Will Morris, managing director, Retail at SSE, defended the small decrease compared to slumping wholesale prices. “Wholesale energy prices account for an ever-smaller proportion of the bill and there are different cost issues affecting electricity and gas," he said. The firm claims the cut will give save customers £32 a year on their bills.

Mr Lewis said the energy firms must be whooping for joy that they can get away with such small cuts and have the energy minister praising them, albeit slightly. “The real picture here is that even after cuts the vast majority of households in the UK are massively overpaying for their energy,” he claimed.

He pointed out that E.on and SEE customers with typical usage on their standard tariffs will be paying at least £1,050 after the cuts, and those from other firms even more. Yet the market’s cheapest tariffs for switchers are around £770/year on the same usage. And indeed both E.on and SSE offer these for those who bother to switch.

“So the message is quite simple, you’re being ripped off; don’t wait, don’t think ‘hurrah prices are dropping’ do a cheap energy comparison and ditch and switch now.”