Households are still paying substantially more for their gas and electricity than they were last summer, despite four of the big six energy firms announcing price cuts this week.
Analysis of what is effectively the shaving, rather than slashing, of costs shows that many still face double-digit rises when compared with what they paid last summer before the huge price rises that came into force late last year.
Not only were those rises up to 19%, but they applied to both gas and electricity, whereas the cuts this week only apply to one fuel per company.
British Gas announced an immediate 5% electricity cut yesterday, while Npower will cut gas costs by 5% on 1 February, EDF will reduce gas costs by 5% on 7 February and Scottish & Southern Energy customers will see gas prices drop by 3.8% on 26 March.
The table below shows how much more a typical household will pay for energy once this week's price cuts come into force, compared with what they paid last summer.
Energy price changes
|Provider||Late 2011 hike||2012 cut||Rise from summer 2011|
|Overall rise based on average cut subtracted from post-hike rates.|
While welcome, critics suggest the cuts are little more than a PR stunt that will have a negligible affect on bills. The energy firms admit themselves that households will only save around £20 or £30 a year from the price falls.
What's more, SSE customers' price drop won't come into force for another two and a half months.The reductions are a result of falling wholesale prices — the price power firms pay for the gas and electricity they sell to us.
Mark Todd, from price comparison site Energyhelpline.com, says energy firms had room to cut prices by even more.
He explains: "We believe there is room for price cuts of up to 10% because of the recent dramatic falls in wholesale prices, but clearly the major suppliers do not feel they have the necessary leeway to go much further than 5%."