Gas prices at record high despite drop in gas wholesale prices

Gas bills for retail customers are still at a record high despite the fact that wholesale gas prices have fallen by 60 per cent.

According to moneysupermarket.com, average gas bills are nearly £800 and yet if they had fallen in line with the wholesale gas price, customers would have seen a £478 saving – from £797 to £319.

Gas suppliers have only passed on small reductions in gas prices which means they are still as a 10 year high.

Scott Byrom, utilities manager at moneysupermarket.com, said “It is understandable that customers are feeling out of pocket.  The providers say there are additional costs, on top of the price they pay for wholesale gas, which also needs to be taken into account, such as investment in renewable energy sources.

This further highlights the need for more transparency and clarification within the industry and more communication between providers and their customers on why there is such a wide gap and how the money is spent.

Competition in the energy market has focused on providers launching new, cheaper tariffs, for new customers and no providers have made substantial price cuts for existing customers.

Competition is especially fierce for “online pay monthly” tariffs which are now £300 cheaper for gas alone than the Standard quarterly tariffs that the majority of customers are still paying.  Whilst for many customers switching to a new provider is the best option at the very least customers should contact their current provider and ask to move to its cheapest tariff.”

British Gas have dropped their gas prices this year by 7%, other energy suppliers need to follow suit.