Saturday, 6 December 2008

Fleeced by the power giants

Power companies are under increasing pressure to pass on the benefit of the plummeting price of oil.

Watchdogs are angry that domestic energy bills have continued to rise sharply since the summer even though wholesale prices have nearly halved.

Millions of families are desperate for gas, electricity and heating oil bills to fall as their household incomes are squeezed elsewhere.

Despite falling inflation, families still face rising food costs and hefty council tax increases next spring.

And pensioners, who already spend a major proportion of their cash on heating their homes, are seeing their savings income slashed by interest rate cuts.

Yesterday oil closed at below 45 dollars a barrel, more than 100 dollars below its July peak, and experts predict that it could drop as low as 25 dollars.

David Hunter, of energy consultants McKinnon & Clarke, said the 'big six' firms - British Gas, E.ON, Scottish Power, Scottish & Southern, EDF Energy, and npower - enjoy a 'stranglehold' on the power market, and claimed: 'The market isn't working.'

He insisted the firms should have room for 'double digit' cuts as soon as next month.

Mr Hunter said: 'It is clear there will be room for reductions in prices, and there will be huge political pressure for them to act.'

Gas and electricity prices are inextricably linked to the price of oil, and utilities say it takes time to pass on lower wholesale costs to customers because they buy power and gas several months in advance.

But the cost of wholesale gas and electricity has tracked the fall in oil prices.
full article

1 comment:

NIC said...

The power companies will hold out until after the winter when use is at it's maximum then reduce prices in the spring.