Energy Bills: SSE Latest To Cut Gas Costs

Another of the so-called big six energy firms, SSE (LSE: SSE.L - news) , has announced a reduction in its household gas price as wholesale costs fall.

The company said the 5.3% cut in its standard tariff would not take effect until 29 March but that would be three months before its current price freeze ends.

SSE is the second major firm to announce such a move this year.

Its third quarter results, released alongside news of its price cut, showed the company had lost 300,000 gas and electricity customers in the UK and Ireland (Other OTC: IRLD - news) between 31 March and 31 December - taking the total down to 8.28 million.

The statement also suggested the firm was on track to deliver a rise in its dividend payout to shareholders.

SSE said of its price cut: "This latest reduction will save a typical household gas customer on our Standard (Other OTC: SNDH - news) tariff £32 per year compared to existing prices and is SSE’s third gas price cut in two years when it announced a unique price freeze in March 2014.

"SSE customers have not seen an energy price increase since November 2013; indeed, the new gas prices will be 12%, or £78 lower for an average customer than 2013 levels.

"A typical dual fuel Direct Debit bill on our Standard tariff will be £1,068 compared with £1,162 in November 2013.

Energy suppliers have come under pressure to cut household bills in recent months following the collapse in world oil and gas prices - with consumers urged to switch between suppliers to minimise their payments.

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Rival E.ON announced a similar gas cost reduction a week ago - with its move taking effect on 1 February.

SSE said today: "Wholesale energy prices account for an ever-smaller proportion of the bill and there are different cost pressures affecting electricity and gas, but SSE is pleased that it will be able to bring down gas prices three months before its current price freeze is due to end."

But Martin Lewis, founder of Money Saving Expert, said: "Again it's just a trivial 5% on gas only, not electricity, nothing close to the drop in wholesale prices.

"Energy firms must be whooping for joy that they can get away with such small cuts."

The company described market conditions as "challenging" - given the energy price environment - and said it planned to complete disposals worth £1bn to help support future investment.

Chief executive Alistair Phillips-Davies said: "SSE remains a resilient and diverse business, with a strong commitment to operational efficiency and delivering value for customers and investors.

"It (Other OTC: ITGL - news) remains firmly focussed on delivering this year’s financial objectives and making sure that the business is fully prepared for the future."