Fall in wholesale energy costs prompts call for price cuts

The cost of gas is at its lowest for ten years, with electricity costs at a nine-year low, according to the ICIS Power Index.

The big six energy firms have cut gas bills by just over 5 per cent this year, but not electricity charges, reports The BBC.

Ann Robinson, a director of Uswitch, called for bills to be reduced further.

She said that consumers had been “short-changed by token gesture price cuts”.

“Given record-low wholesale costs, suppliers must do the right thing and reduce standard tariffs by a further 10 per cent,” she said.

However the industry points out that wholesale costs make up just 45 per cent of a typical dual fuel bill.

Energy suppliers also buy power up to two years in advance, so what they pay for power does not necessarily reflect the current cost.

Between January and March gas costs averaged 32.3p a therm, according to the ICIS index, while electricity costs averaged £35 per megawatt-hour.

Oil prices – which have an influence on gas prices – hit a low of around $28 a barrel in January this year.

One additional reason for the fall in costs was the mild winter, said ICIS.

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