NPower Announces Gas Price Cuts

Another of the UK's Big Six energy suppliers has announced a cut in its gas prices in a move benefiting about 1.3 million customers.

Npower, which is part of German utility company RWE, said its average tariff will come down by 5.1% from February 16, making it the largest percentage price cut in the recent wave of announcements from the sector.

British Gas is cutting prices by 5% from February 27, Scottish Power by 4.8% from February 20 and E.ON has taken 3.5% from bills with immediate effect.

The npower reduction means that on average the company's annual standard domestic gas tariff is now £667 per year, down from £702.

The industry-wide reduction in bills reflects the falling cost of energy on wholesale markets, although companies have come under fire for being too slow in passing on the savings.

Recent figures from industry regulator Ofgem show that wholesale gas prices are down 19% on last winter.

RWE npower chief executive Paul Massara said: Today's announcement means we can get the benefits we are seeing in the wholesale market to our customers pockets as soon as possible.

We have balanced this wholesale price fall against increases in the other costs we are charged. If there are further falls in wholesale prices, we will keep these under review to see if we can cut further.''

SSE and EDF are the remaining two companies out of the Big Six still to announce price cuts.

Energy Secretary Ed Davey said: Competition is driving down prices and it's consumers that will benefit. There's now even more pressure on the remaining energy companies to follow suit and cut their prices.''

Martin Lewis, founder of independent consumer website moneysavingexpert.com, said he was concerned that the recent price cuts will give people a false confidence that they are on a good deal.

He pointed out that Npower's standard price for someone on typical usage was now £1,169 per year but the market's cheapest deals are about £915 a year on the same usage.

Mr Lewis added: With the wholesale price of energy having come down by about 20%-30% since the start of 2014, and the prices of the cheapest switchers' deals having dropped more than 10%, these cuts are trivial.

The urgent warning is for everyone to do a comparison to check if they're overpaying and which their cheapest is.''