Scottish Power will reduce bills

Published 28th Feb 2009

Scottish Power has become the latest energy supplier to announce cuts in bills, starting at the end of March.

The supplier, which has 5.2 million UK customers, said that gas prices would fall by 7.5% on average from 31 March.

Electricity bills will also drop by 3%, following cuts by four of the other "big six" energy firms.

Npower is the only one yet to announce price cuts this year, after all the major suppliers put up bills when wholesale prices rose in 2008.

'Market volatility'

Scottish Power said that an average dual fuel customer paying by direct debit would see their annual bill drop by £54 to £1,156.

Willie MacDiarmid, Scottish Power's director of retail energy, stressed that the company was the only one to join Scottish and Southern Energy in reducing prices of both gas and electricity.

"The past year has seen unprecedented volatility in the wholesale energy market, and the future outlook remains challenging," he said.

"Although wholesale prices have fallen recently, the market remains volatile."

More than seven million British Gas customers saw a 10% cut in gas bills take effect from 19 February.

Scottish & Southern will cut the price of electricity by 9% and gas by 4% from 30 March.

EDF Energy has announced it is cutting electricity bills by an average of 8.8%, and E.On has announced a 9% cut. However, both their gas tariffs will remain unchanged.

More cuts?

Analysts have suggested that energy prices could be cut again later in the year if the wholesale price continues to fall.

Information from market analysts Inenco reveals that wholesale prices, for gas bought on a 12-month contract, fell to the same level at the start of 2009 as was seen in February 2008.

There was a big spike in wholesale costs in the middle of 2008 that prompted significant increases in domestic bills by all the major suppliers in the autumn.

Scottish Power put up gas prices by an average of 34% and electricity prices by 9% in September 2008.

But some analysts suggest wholesale prices could rise again and so, as early as 2010, domestic energy bills could start to rise too.

Source: ' bbc '

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