After a relatively mild winter, the wholesale price of gas has been falling, and E.ON has announced that they are the first of the ‘Big six’, the 6 largest energy suppliers in the UK, that will be passing on these price cuts to their customers.
Gas prices are at almost 27% lower compared to this time last year, and electricity prices are at a two year low. Due to this E.ON have said they will be taking an average £24 off every household bill that they supply.
On top of reducing existing customer prices, E.ON have also announced they are creating a new tariff scheme that will see the cheapest rates of any supplier in Britain. The Fixed 1 Year v14 is an electricity and gas providing tariff that will combine cheap supply with the ease of online billing, fixed energy prices for 1 year and no IGT charges. This new tariff won’t frustrate existing customers either, as E.ON have said any current customers who want to take advantage of the new tariff, will be able to do so without having to pay any exit or administration costs.
In a very tight and competitive market, this move from E.ON to pass on large wholesale price reductions to their customers is likely to prompt several others to do the same and match E.ON’s customer focus. Many have commented that with Labour looking to attempt utility price freezes, setting a low rate now could backfire if freezes occur. E.ON seems to want to show that it is a customer first, profit second organisation.
E.ON have given guidance to any political parties looking to set price caps on energy bills and have asked for realistic energy policies that support both the customer and also the business involved.
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