EDF cuts gas prices by 5%
French power giant EDF has unveiled a 5% price cut in its gas prices - following a 15.4% rise last year.
As a result of the price cut, set to come into force from February 7, EDF said its dual fuel tariff will be the lowest of the 'Big Six', which all raised their prices last year in response to increased wholesale gas prices. It is thought the cut could spark a price war among the UK's other major energy firms as they rush to follow suit.
The move, however, sees EDF follow smaller suppliers such as Ovo Energy and Co-Operative Energy in passing on the decrease in wholesale prices, which fell as a result of the mild winter weather, to their customers. The price of wholesale gas has fallen by 9.2% since EDF announced it was raising its bills in November.
Last week (January 6), independent energy company Ovo Energy reduced its dual fuel fixed tariff prices by 5%, bringing down dual fuel bills to an average of £1060.77 per year against a national average of £1194 for comparable tariffs set by the Big Six.
Ovo Energy managing director Stephen Fitzpatrick, said: "Due to a recent decrease in wholesale costs, we are able to respond and pass on these savings to consumers, thereby giving them a cheaper and simpler alternative to the "Big Six".
Despite the cut to gas prices, no cut was made to EDF's electricity bills which rose by 4.5% in November.
EDF 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.
"Today's price cut is further evidence of our commitment to be fairer, simpler and more transparent. This is vital for consumer trust. We are working on a range of further steps as a responsible energy company to continue to build trust."
Consumer campaign group Consumer Focus described the cut as an "an overdue but nonetheless welcome move", adding that it would create much needed movement in the energy market following stiff prices increases for consumers last year.
Consumer Focus director of policy and external affairs Adam Scorer, said: "EDF Energy is the first of the major suppliers to reduce prices and the others will need to respond. The cut is not enormous given the scale of increases last year but it creates some important momentum in the market. It is now up to the rest of the 'big six' to compete and consumers will expect to see price come down across the board.
'Wholesale prices are at their lowest point in almost a year and the trend is down. Underlying market fundamentals - especially wholesale prices - should determine the price consumers pay."