Eon announces 5.1 per cent cut to gas tariffs

Eon has announced a 5.1 per cent cut to its standard gas price.

The reduced rate will apply from 1 February to both fixed and variable tariffs, although existing fixed rate customers will need to change to new versions of the tariffs launched today to access the lower prices. The company claims the price cut will knock £32 off the average household’s yearly bill.

The big six suppliers have come under increased pressure recently to reduce tariffs in the wake of falling wholesale costs, with the boss of Ofgem joining calls for price cuts last week. A report by market analysts Icis found wholesale gas prices fell by 34 per cent last year and look likely to continue falling in 2016. 

The chief executive of Eon, Tony Cocker, said the cut was ‘the right thing to do’. Explaining the why the cut wasn’t bigger, he said: “The underlying position is that whilst the price we pay for our customers’ energy has fallen, we also have to take account of managing the various other risks in the market which can change, and the fact that many of the other costs that we don’t control but do have to bear have increased or may increase.

“Once you’ve built in various uncertainties and other factors, while the wholesale market movements may translate across to a dual fuel domestic bill for a drop in prices of under 10 per cent, the inclusion of those other factors translates the percentage to the standard gas cut announced today. We will continue to keep all these factors under review.”