Scottish Power Drops Bills By 5% As Big Six Energy Firms Slash Tariffs
ScottishPower has became the last of the big six energy companies to announce reductions in its tariffs, with prices set to fall by an average of 5%.
The firm said around 1.4 million domestic gas customers would receive lower gas bills from next month, which would see an annual reduction of £36 for average dual fuel and gas monthly direct debit customers.
The reduction will become effective on 27 February.
Neil Clitheroe, ScottishPower's CEO of Energy Retail and Generation, said the cut was part of the firm's commitment to competitive prices, but warned that tariffs would go up again.
"We understand that household budgets are tight in these tough economic times and with this in mind we are pleased to be able to pass on lower prices and help our customers when we can," he said.
But he added: "Although there has been a short-term fluctuation in the wholesale gas market that has allowed us to pass on today's reductions, the global demand for energy is increasing faster than its supply. This will inevitably lead to higher energy costs in the long term."
Customers were advised to contact their supplier to ensure they were on the best tariff for their circumstances.
The announcement from ScottishPower came after E.ON announced a 6% fall in electricity bills, benefiting 3.7 million customers, earlier on Monday.
This move will also come into force from 27 February, shaving £31 off the average annual bill. But the group left gas prices unchanged.
E.ON and ScottishPower were the final two of the big six suppliers to announce a cut in recent days after falls in wholesale prices, although none has yet cut both gas and electricity.
British Gas last week cut bills for more than five million customers by making an instant average cut of 5% in its standard electricity tariff.
E.ON UK chief executive Tony Cocker said: "We understand that household bills are the most pressing concern for families across the country.
"Whilst we're pleased to pass on this recent slight fall in wholesale prices, most experts agree that global energy prices will continue their long-term rise."
But the falls in prices across the big six firms do not compensate for recent increases.
All six put prices of gas and electricity up over the summer or autumn following increases last winter, blaming rising wholesale costs.
And suppliers have been accused of failing to cut prices as quickly as they put them up.
Adam Scorer, director of policy and public affairs at Consumer Focus, said: "It's good to have seen such a quick series of price reductions. We hope this shows suppliers are waking up to the need for customers to see rapid cuts when wholesale prices are low and that this trend will continue if wholesale costs carry on falling.
"But customers will still be paying a lot more for their energy than they were a year ago and there will still be almost seven million households in fuel poverty."