Challenger supplier Igloo Energy has announced a 30 per cent cut to its gas prices as coronavirus continues to impact global wholesale prices.
With the pandemic resulting in reduced industrial demand, wholesale prices have fallen. Igloo says the cut to its tariff will range from 22-30 per cent, depending on which area a customer lives, reflecting differences in the cost of distributing gas regionally.
The reduction means the disruptor brand’s single tariff, the Igloo Pioneer, will be more than £320 cheaper annually than the price cap.
Price comparison service Uswitch said it had not seen any other suppliers reduce their prices and that it does not expect them to do so.
A spokesperson explained that larger players buy energy in advance so there is usually a delay between the wholesale cost and the retail cost, adding that smaller suppliers can be more agile.
“Generally we tend to see the cheaper fixed tariffs follow changes in wholesale prices more closely while standard variable tariffs stay fixed at the capped level,” they said.
“Energy providers which operate in the business sector are also going to see their customers’ usage drop significantly, so managing the business under-consumption and consumer over-consumption also won’t translate into a price decrease,” they added.
Igloo added that although electricity costs have also fallen, increases in distribution costs and the impact of renewable schemes mean it has not yet been able to reduce its electricity tariff further.
Chief executive, Matt Clemow, said: “At this incredibly challenging time for all UK households, we’re proud to be lowering our customers’ bills again. The impact of COVID-19 has been significant reducing global natural gas prices dramatically, and is changing the way customers use energy at home, so we’re taking action early to pass on these significant savings as any good supplier should.
“We’re doing everything we can to support our customers through this difficult period and I’m incredibly proud of the Igloo team for continuing to deliver the same level of exceptional service that our customers have become accustomed to.”