Gas bills could drop in 2007
Published On 2 January 2007
House energy bills could drop considerably in 2007 following a 50 per cent drop in the wholesale price of gas last year. This is the prediction of one industry expert, Joe Malinowski, who founded TheEnergyShop.com and believes consumers will see a ten per cent price cut in spring.
On top of this, Mr Malinowski has said 2007 could see further prices cuts meaning bills fall by a third over the next 12 months.
He told BBC Radio 4's Money Box programme: "The wholesale price of gas has tumbled. It is 55 per cent below its peak of June 2006 and more than 50 per cent lower than at the beginning of the year. Electricity is over 35 per cent lower than the start of 2006.
"We expect the first cut to be in the spring – order of magnitude about ten per cent for gas and electricity.
"The wholesale gas price for 2008/2009 is 1.35 pence per kilowatt hour. Add transport, metering and a [profit] margin you should be selling that at 2.2 pence. British Gas sells it [to some customers] at over three pence so in theory it could fall by almost 30 per cent."
