Monday, 20 October 2008

Energy firms 'failing to pass on falling oil prices to consumers’

The Prime Minister and Ed Mayo of Consumer First are putting public pressure on power companies to cut their gas and electricity prices in line with falling world oil prices.

A series of sharp price rises by the big energy suppliers earlier this year have left the average household facing an annual gas and electricity bill of more than £1,300.

Some companies put gas prices up by more than a third, blaming the rise on soaring world oil prices.

But oil prices have now fallen by half after it reached an all-time high of $147 a barrel earlier this year. A barrel of North Sea oil now costs $73.02.

Some big European gas suppliers’ contracts tie gas prices directly to oil. As oil prices peaked in the summer, wholesale gas prices also rose. They have now fallen by more than quarter, but household bills have not come down at all.

Mr Brown is now piling public pressure on energy firms to start cutting consumers’ bills.

”What we have seen is prices going up for fuel and energy when the oil price went up and now that the oil price has come down, the public would naturally expect retail prices for fuel and household energy to come down as well,” said a spokesman for Mr Brown.

Ed Miliband, the new Energy Secretary, last week met executives from the “Big Six” energy retailers to underline the Government’s desire for prices to fall quickly.

Ed Mayo, the chief executive of Consumer Focus, accused the industry of delaying price cuts.

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