Chancellor and energy firms to give consumers a break

For UK utilities customers, good news has been rather like London buses – after waiting almost a year for just one glimmer of hope, three come along almost all at once.

Just last week, three of the 'big six' energy suppliers, British Gas, Scottish Power and Scottish and Southern Energy, hinted that they are looking into passing the recent fall in the price of wholesale oil onto struggling consumers.

Now, German utilities firm E.On has revealed that it is hoping to follow suit and cut gas and electricity prices "as soon as it is able", spelling good news for consumers who make shopping around and switching energy suppliers one of their New Year resolutions.

In a statement released by the company's chief executive in the UK, Dr Paul Golby, he stated: "If we continue to see falling wholesale electricity and gas prices, we'd hope to reduce customers' prices as soon as we are able next year.

"We're obviously very aware of the difficulties our customers are experiencing, especially considering the current economic problems and we're monitoring wholesale prices closely in the hope of making this move."

What's more, in his pre-budget report this week, chancellor Alistair Darling indicated that he is to ask the energy industry regulator, Ofgem, to look more closely into the movements between wholesale oil prices and retail energy tariffs in order to ensure that consumers don't miss out on any potential savings.

Indeed, Mr Darling revealed that he intends to make the regulator check on the market movements at least once a quarter, suggesting that big savings could be on the horizon for those consumers savvy enough to shop around for the best deals and switch suppliers if necessary.

Despite this, it won't be all plain sailing for utilities customers in 2009.

While they have signalled their intention to reduce tariffs, energy firms have long maintained that it is simply not practical to pass on the savings made in the wholesale market right away.

Rather, given that they are required to sign fixed contracts in advance for their supplies, this winter's supplies have already been purchased at a high price.

As such, consumers expecting prices to drop as quickly as the markets have fallen should think again.

For the time being, the best means of getting through a tough winter remains being as energy efficient as possible and switching utilities suppliers if possible, in the hope the 2009 will bring action and not just promising rhetoric from big business and government.