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Big energy company finally lowers prices
E.ON is cutting its standard gas prices by an average of 3.5% with immediate effect.
This is the equivalent of £24 off an average annual gas bill and makes E.ON’s standard tariff, the E.ON EnergyPlan, the second cheapest on the market.
In addition the ‘Big Six’ supplier has also launched a new tariff, which is now the cheapest energy deal available in the UK.
The E.ON Energy Fixed One Year v14 will cost £923 a year for a typical household with average consumption opting for paperless billing, or £933 a year for those that prefer to have paper bills.
The 12-month fixed rate tariff comes with a £5 exit fee per fuel and is available to new and existing customers on a dual fuel or electricity-only basis.
The firm said its 4.5 million residential customers could switch to the new product without incurring any exit fee.
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First move
E.ON is the first big supplier to reflect the overall drop in wholesale gas prices this winter.
The move follows pressure from ministers.
Matthew Hancock, Business, Energy and Enterprise Minister, recently wrote to the six biggest energy companies demanding price cuts as wholesale gas prices are 30% lower than last year.
Smaller suppliers like Extra Energy, First Utility and Co-operative Energy have been quick to pass on the savings, but the Big Six suppliers (E.ON, British Gas, npower, Scottish Power, EDF and SSE) have been reluctant to move, until now.
E.ON said it was making the cuts despite increases in other non-energy costs.
Tony Cocker, Chief Executive of E.ON UK, said: “While oil prices have slumped, the gas price has remained volatile - some days up, some days down - and many of the other non-energy costs that we don't control but make up a customer's bill have increased and are set to increase further.”
The firm emphasised it was taking an even bigger risk with calls from Labour to give new powers to energy regulator Ofgem to force companies to implement a “price freeze”.
Cocker added: "Given the possibility of a price freeze we are undoubtedly taking a risk today but we always put our customers first…We have made this decision knowing that our ability to recover costs, should the market outlook change in the months or years ahead, may be limited but we urge all political parties to recognise the realities of the energy industry and help us to continue to do the best for all of our customers.”
The cheapest energy tariffs
Here is how the best buy energy tariffs shape up following E.ON’s move.
Energy supplier | Tariff name | Average UK price* |
E.ON | Energy Fixed One Year v14 (paperless billing) | £922.99 |
E.On | Energy Fixed One Year v14 (paper billing) | £932.99 |
Extra Energy | Fresh Fixed Price Jan 2016 v6 | £934 |
Extra Energy | Clear Fixed Price March 2016 v3 | £935 |
First Utility | iSave Fixed March 2016 v42 | £935.49 |
Extra Energy | Bright Fixed Price Jan 2016 v7 | £937 |
Co-Operative Energy | Fair & Square March 2016 | £938 |
First Utility | iSave Fixed March 2017 | £960 |
npower | Fixed Energy Online April 2016 | £963 |
ScottishPower | Online Fixed Price Energy January 2016 | £970 |
Source: lovemoney gas & electricity comparison centre.
*Prices based on average consumption as measured by Ofgem of 13,500kWh of gas and 3,200 kWh of electricity and a customer paying by monthly direct debit including VAT on a duel fuel tariff .
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