Electricity price cuts 'not enough', consumer groups argue

After a tough winter struggling to cope with rocketing prices, consumers are starting to benefit from the ongoing turbulence in the world's energy markets, with British Gas announcing that it is to reduce its electricity bills by ten per cent.

In a statement released by the company, which is owned by energy giant Centrica, it confirmed that a typical dual fuel bill will now fall by £132 to £1,127 a year, with this set to affect around 4.5 million customers, as well as many more who opt to switch utilities suppliers to take advantage of the new pricing structure.

And, just as all of the 'big six' suppliers cited high wholesale oil prices when introducing their own price hikes towards the end of last year, so too has British Gas explained that this move has been made possible by the fact that the cost of a barrel of crude has fallen from last summer's peak of $147 to just $50.

According to British Gas managing director Phil Bentley, this latest move spells good news for consumers across the country, both existing customers and those happy to shop around and switch utilities suppliers in search of the best deal.

"British Gas is offering existing and new customers the cheapest electricity rates in the market place," he said.

However, the news has only received a lukewarm reception, with many observers believing that the company – which was lagging behind its rivals, anyway, after they cut their prices by ten per cent back in February – has yet to do enough to help consumers currently struggling with contracting levels of disposable income.

Independent watchdog Consumer Focus expert Robert Hammond is among those who feel this latest round of cuts doesn't go far enough.

"We would have expected much bigger reductions," he argued.

"This again raises the question of whether wholesale price cuts are being fairly passed on to consumers."

Indeed, the more cynical could point to Spain as an example of where suppliers are doing their utmost to help out their customers.

Just this week, the country's deputy prime minister Maria Teresa Fernandez de la Vega announced that electricity tariffs are to be frozen until 2012 for households that either have all family members unemployed or on the minimum state pension.

However, even this is far from an act of charity, with the utilities firms agreeing to pick up the tab in exchange for a deal on Spain's energy tariff deficit, which currently stands at more than $18 billion.