British Gas today cut electricity prices by 10% for 4.5 million domestic energy customers after a fall in wholesale prices.
The company, which is the biggest supplier of domestic electricity in Britain, said the average dual fuel customer would see bills fall by £132 a year to £1,127.
It claimed the cuts made it the cheapest supplier of electricity in the country, with its rates now up to £111 a year lower than other firms. Other suppliers will now be under pressure to follow suit and reduce their prices.
The move follows a 10% cut in gas prices by the firm in February and has been driven by a fall in oil prices, which have dropped from a peak of $147 a barrel last summer to around $50 as the global economic crisis has deepened.We are very likely to see reduction in gas and electricity prices by other companies as well.

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Alistair Buchanan, chief executive of Ofgem, promised more protection, clearer contract terms and an end to the contentious automatic rollover practice when fixed-term contracts to end as small business owner are traped into the roll over contracts format where they end up paying double charges and can’t switch over to different supplier for the same period, the simple reason is that every major supplier in United Kingdom require written notice before certain period to end any supply contract whether it gas or electicity contract if consumer fails to do so it rolls over to next 12 months.

The measures are part of a package aimed at a crackdown on unjustified price differences, more safeguards for vulnerable customers on pre-payment meters and removing obstacles preventing householders and businesses accessing better offers.

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The current economic situation in the UK and the steep rises in gas and electricity bills has caused serious financial problems for millions of British homeowners. However, those people who are tenants are now finding that they are facing a heavy financial penalty for fluctuations in the energy market. The situation is now considered to be so serious that potential tenants are now seeking assurances from landlords that their rental properties are energy efficient.

Most savvy landlords have already capitalized on this new opportunity to attract new clientele by ensuring that their properties possess energy performance certificates. Additionally, The Landlord’s Energy Saving Allowance also allows property owners to recoup the money that they have spent on installing insulation.

Those landlords ,in England and Wales,who have previously sought to avoid obtaining energy performance certificates are in for a rude awakening as the government has passed laws to ensure that they must provide proof of these certificates when letting out their properties.

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With huge price hikes in gas and electricity bills affecting a significant proportion of the UK’s 60 million population, shopping giant Tesco has stepped into the energy saving arena by announcing that it will provide free loft and cavity wall insulation for those who are on benefits or over the age 70. Other customers will be charged a fee of £199.

Tesco revealed that it had seen data that showed that around 9 million British domestic properties did not have proper insulation. The company aims to assist 500,000 people to trim their energy bills. The announcement comes hot on the heels of the Government’s unveiling of a £1 billion energy saving package designed to help the most vulnerable households.

Presumably, it didn’t take Tesco long to work out that customers who save money on the cost of their energy bills will have more cash to spend on other essential items ,such as food, which can be purchased from the retailer.

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UK energy regulator Ofgem has completed a seven month inquiry into the British gas and electricity supply market. In its findings the watchdog revealed that although it found no evidence of price fixing between the big six suppliers – Centrica, RWE,EDF, Scottish Power, E.ON and Scottish and Southern Energy - it was concerned that over 4 million British consumers are losing,on average, £55 per year because they are not benefiting from the best available tariffs.

Ofgem has announced that it will move to place a ban on, what it considers to be grossly unfair, differences in pricing. The organization added that there must be an end to the practice of charges being linked to different modes of payment and there must be more clarity in the way that energy price plans are presented to customers. Far too often, consumers do not fully understand what it is that they are signing up to.

Ofgem also warned the largest energy operators that the UK’s Competition Commission would be invited to launch a detailed investigation into the industry’s pricing structures if energy suppliers failed to implement their recommendations.

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Energy experts have predicted that the UK could be subjected to a shortage of power supplies when the National Grid revealed that forward wholesale electricity prices for November had soared to £133 per megawatt hour. This represents a £10 increase in comparison to last week’s prices.

This could lead to the UK’s energy market being close to exhaustion which would cause a series of huge blackouts. However, the National Grid sought to ease these fears by saying that the market had not yet reached its safety limit in terms of capacity. It was suggested that black outs might occur if power plants developed technical glitches.

A number of concerns have already been raised about the instability of Britain’s gas and electricity supplies. One such warning focussed on the UK’s reliance on external energy providers such as Russia which has a reputation for curtailing supplies to countries that do not share its political point of view.

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Newly released Department of Environment statistics showed that fuel poverty figures had risen to 3.5 million by 2006. This represents an increase of around 1 million on 2005 figures.

According to general classifications a household is regarded to be in fuel poverty if its occupiers spend more than 10% of their income on gas and electricity. The government said that the huge increase in fuel poverty was the result of price hikes by power companies.

Minister for the Environment, Hilary Benn, stated that the soaring cost of energy bills has hampered the government’s ability to tackle the problem of fuel poverty. He added that government expenditure on energy saving measures and fuel poverty had totalled £20 billion since 2000.

Various charities and unions have said that gas and electricity prices are currently out of control and requested that the government take immediate action to cap energy bill prices. The government’s latest energy saving programmes also came in for heavy criticism.

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The signs are that the UK is heading towards a recession and is facing its worst energy crisis in decades. Obviously, this is bad news for homeowners who are having difficulty in trying to balance their household budgets. For those who are faced with massive increases in gas and electricity bills, now is the time to consider changing energy providers.

It is estimated that there are around 4 million households that have never switched their original supplier.

Consumers should use comparison websites to locate the best online energy tariffs. These website swill show you how much money you can be saving by simply entering your energy consumption rates and your postcode. Once you’ve supplied these details you will be able to see which providers have the best deals that are suited to your personal needs.

It may be prudent to restrict your search for tariffs to the six largest power companies – EDF, British Gas, nPower, E.On, Scottish and Southern Energy,and Scottish Power – because historically some of the smaller firms have been forced to close because of sudden upheavals in the energy markets.

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With the energy crisis in full swing the UK Business Minister, John Hutton, has said that it is the intention of the government to restrict the amount of gas that is imported into the UK. The minister stated that there will be a sustained push to build some new nuclear and coal power stations and such action is necessary to preserve and protect the future supply of British energy.

Gas and electricity price hikes are hitting the most vulnerable families the hardest, and the government’s $1 billion energy efficiency package has drawn broad criticism from a variety of charities and campaign groups.

The ability of power companies to raise prices without fear of intervention has also proved to be embarrassing for those elected officials who are charged with ensuring that the UK has sufficient energy reserves to prevent the poorest households from suffering unnecessarily.

Currently, Europe is heavily reliant on Russian gas imports and experts have warned that the UK could be held to political ransom if it does not find an alternative to Russian gas.

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A survey by Thebabywebsite.com has found that the impact of the sudden increases in food prices and gas and electricity bills is causing couples to have a rethink on whether they start a family. The survey which sought the views of 3,000 couples found that over 35% of those polled said they would have to place a hold on their family making plans whilst 30% commented that they would not start a family, especially since the credit crunch was continuing to have such a negative impact on household finances.

One fifth of respondents said they would take the drastic measure of terminating a pregnancy if their finances meant they were in a situation where they believed they would not be able to afford the cost of bringing up a child. Many couples stated that the difficulty of obtaining a mortgage and the massive hikes in energy prices would mean that they would not be able to cope with everyday living costs.

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