npower cuts gas bills by 5.1%
npower has joined the likes of E.On and British Gas by announcing a cut in gas bills, but customers will have to wait as the 5.1% cut will not be introduced until 16 February.
The firm said the reduction, worth £35 a year for the average customer on its standard domestic gas tariff, takes a typical annual bill to £667.
While, it is the largest percentage price cut by any of the Big Six energy firms announced to date, smaller firms have announced larger cuts. Ecotricity, for example, is slashing bills by 6.1%, saving customers around £41 a year, although it will not be introduced until 1 May.
Paul Massara, chief executive of parent group RWE npower, 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."
npower becomes the fourth of the Big Six energy firms to announce a reduction in gas prices, following Scottish Power (4.8%, from 20 February), British Gas (5%, from 27 February), and E.On (3.5%, on 13 January).
However, energy market insiders said the cuts have not reflected falls in oil prices and the Big Six could have slashed bills by more.
A drop in the ocean
Stephen Murray, energy expert at MoneySuperMarket, said: "The npower cut is an improvement on those that have gone before but it's still far from the level it could be. While a saving of 5.1% is of course a step in the right direction, it's a drop in the ocean compared to the fact that wholesale prices have dropped by 20% in the last year.
"Households don't need to wait for cuts from the energy firms to take effect. Instead, bill payers could give themselves a much bigger price cut by taking five minutes to shop around for the best energy deal for them. The savings are there for the taking – an average standard monthly direct debit customer could typically wipe £266 off their bills by switching to Extra Energy's Fresh Fixed Price Jan 2016 v9."