E.ON cuts gas prices by 6%

E.ON today became the latest energy company to announce a cut in gas prices for domestic customers. The energy supplier said around 1.9 million residential customers would see prices decrease by 6%, reducing their annual gas bills by an average of £42. It claimed the cuts meant its customers would be £26 a year better off than those who were with British Gas. The price cut, which follows 7% reductions by British Gas and Scottish & Southern , will come into effect on 31 March for most customers, although those on E.ON's WarmAssist deal for vulnerable customers will have the reduction back-dated to 1 March. Graham Bartlett, managing director of E.ON's retail business, said: "We've been very aware of the effect of both the recession and the exceptionally cold winter on our customers, especially those most in need, so we are pleased to see the opportunity to now reduce prices." Although wholesale gas prices have fallen dramatically in recent months, leading to calls from charities and consumer groups for the energy companies to make bigger cuts, Bartlett said these were "only part of the pricing story as our customers are using gas bought over a number of years at much higher prices than today". This is the third time in a year that E.ON has cut energy prices. Last March it reduced gas bills by 3.3%, and in July it cut electricity tariffs by 9%. However, according to price comparison website uSwitch , average bills for E.ON's dual fuel customers still remain 30%, or £272 a year, higher than in January 2008, at £1,232. Ann Robinson, director of consumer policy at uSwitch, said: "Now that three of the big six have moved we can also see a clear trend emerging with gas price cuts coming in at around 5% or £40. "This will not make up the ground lost two years ago when suppliers increased prices by 42% or £381 and we now expect household energy bills to end up around £270 higher than two years ago, putting even more emphasis on the need for consumers to start managing their energy costs."