Independent energy company Ovo Energy has reduced its dual fuel fixed tariff prices for new and existing customers by 5%, making its ‘New Energy’ tariff the cheapest on the market. The company says they have been able to pass on a reduction to customers due to a decrease in wholesale market costs.

Ovo’s ‘New Energy’ dual fuel tariff comes in at £130 cheaper than the average £1194 tariff from the ‘Big Six’ providers. The reduction, which comes in today, means an average UK household using 16,500 kWh of gas and 3,300 kWh of electricity will now pay £1060.77 per year.

Audrey Gallacher, Director of Energy at Consumer Focus said: “Customers will be glad to see that Ovo has reflected falling wholesale costs in the prices they are asked to pay. 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.”

Ovo’s price cut follows a 3% price decrease from Co-operative Energy announced in December.