Energy firm cuts gas prices by 5%
A major energy company has announced plans to cut its gas bills by 5% in a move expected to spark reductions by rival suppliers.
EDF Energy increased gas tariffs by 15.4% in November but said wholesale costs had fallen by 9% since then, prompting the cut from February 7.
Consumer groups called on other firms to follow suit after a prolonged period of price rises since the last round of tariff cuts in spring 2010.
Mark Todd, director of the price comparison service Energyhelpline.com, said: "EDF has thrown the first punch in the energy price war to come. The reduction is less than expected but it is quicker and for that millions of homeowners concerned about winter bills will be relieved."
The move comes on the day that an annual energy company satisfaction survey carried out by Which? showed that EDF finished second bottom in a table of the biggest six energy suppliers. Only 43% of its customers said they were satisfied with the company's service or likely to recommend it to others.
The surge in complaints follows the introduction of a new billing system.
EDF, which was the last of the major suppliers to raise prices in the autumn, said fair tariffs were vital to "address the issue of consumer trust". It said its average bill for a dual fuel customer with typical consumption paying by monthly direct debit will be £1,129 a year, compared with the current £1,218 a year for British Gas.
Chief executive Vincent de Rivaz said: "What customers want more than anything else is fair, clear and transparent prices. We know they want action rather than words. That is why we are the first major supplier to announce a cut and were the last to increase prices."
The industry will be under pressure from regulator Ofgem and consumer groups over the coming months to show that household bills reflect current wholesale costs in the same way they did when prices were rising.
In December, regulator Ofgem said the average profit generated per customer by the industry stood at £105, having peaked at £125 in October following a round of price hikes. The margin figure had been £15 in June.