The price cut announcements made by the Big Six, Britain’s biggest electricity and gas suppliers, surely caused a stir on the energy market.
One supplier after the other announced reductions of about 5% either on gas or electricity prices.
But after 18 months of price hikes, will this make any difference? Will businesses be affected by it too?
According to energy consultants Catalyst, the price reductions for Electricity and Gas announced last week represent about 15 per cent of the value of the increases announced by the “Big Six” in the autumn.
Consumer Focus analysis concluded that the average household energy bill is 14% more expensive than the same time last year.
In financial terms these cuts will represent savings of about £26 to £39 annually, whilst autumn price hikes added up to a total of £220 annual increase for a household on a dual fuel tariff.
Over the past 18 months energy bills became 21% more expensive so a 5% cut is rather insignificant, unless these cuts are the first of a series of prices cuts the Big Six are planning to try and regain their costumers trust.
While householders are enjoying a slightly but none the less welcomed reduction on their energy bills, business users are not likely to have the same luck.
Business electricity and business gas contracts are usually revised once a year and predictions are that the prices will go up once again in 2012.
An alternative to avoid these problems is to switch supplier and negotiate better tariffs. In this case the best option is to seek professional help. A cost effective solutions is to hire an energy consultancy firm such as Catalyst to find your business the best possible tariffs, enabling you to save time and money.
Another alternative for businesses, especially those that consume large amounts of energy, are flexible energy contracts. These types of contracts provide the ability to spread energy purchasing decisions over a period of time which makes businesses more responsive to prices changes throughout the year and reduces risks of fixing a contract when prices are at a peak.