OVO Energy Cuts Electricity & Gas Prices
One of the smallest energy providers, OVO Energy is cutting gas and electricity prices by 5%.
OVO Energy, which Utility Exchange reported before Christmas cancelled a proposed price rise, is cutting its fixed rate dual fuel tariff by 5%. This means household energy bills will be cut by around £55. However, the cut is not applicable to customers already on a fixed rate contract with the company.
OVO Energy has cut prices in response to a fall in wholesale energy prices and the company’s decision will highlight other gas and electricity suppliers who last year raised prices as a result of rising wholesale costs but do not seem to be prepared to lower prices when costs fall.
Last year the big six energy companies increased gas and electricity prices by as much as 19%. January is always a difficult month for consumers coping with Christmas bills and high winter utility costs. This decision could persuade many people who have not compared energy prices in the past to now compare and switch to a more competitive deal.
There are still a large number of households which do not compare energy prices and many businesses too. At a time when some suppliers are increasing prices and others are cutting them it’s important to compare electricity prices and gas costs.
The cut will apply from today and will mean the average household energy bill with OVO Energy falls to £1061 a year. It comes after another new energy supplier, Co-operative Energy, cut prices by 3% in December as reported at the time by Utility Exchange.
The managing director of OVO Energy, 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’. January is always a challenging month for everyone’s bank balances, so we are delighted to do what we can to help make paying for energy a little easier”.
The director of Consumer Focus, Audrey Gallacher said “This is a market fundamental which must be reflected across the sector if wholesale costs continue to fall. The gap between wholesale and retail prices remains a fault line for consumer confidence in the energy market. The further the wholesale price falls, the greater will be the clamour for others to follow Ovo’s lead”.