Gas bills a lot of hot air?

With wholesale gas price close to hitting record lows, will the energy giants pass on savings in lower bills or bank higher profits? For some, it might still be a question of ‘heat or eat’ this winter.

The mainstream media have woken up to the falling price of household gas, now close to record lows. They noticed the falling prices when when it had dropped to 44.1 pence a therm, the basic measure you see in your bill. The gas price has now dropped to 39 pence a therm and may fall further.

But we’ve all seen what is happening with the oil price. The price of a barrel of oil has now fallen fallen more than 60 per cent in six months, but the oil companies are very slow in passing that on at the pumps.

Even when they do, they don’t pass on all of their savings to the motorist.

The oil price has dropped from just over $115 a barrel six months ago In 2008, UK oil prices – Brent crude – hit a peak of over $145 a barrel six years ago.

It now trades at $45 a barrel.

Reflected in household bills?

Gas and oil are both widely used in generating household electricity so their price collapse in the last six months alone – never mind from historic highs in 2008 – should be reflected in what we see in household bills.

Like oil retailers, the big six energy companies seem quick to pass on the higher prices they pay. But seem much slower to pass on price cuts.

Their charges to households are not fully reflecting the rock bottom prices they are now paying.

There is no sign yet that the Big Six energy giants are passing on the huge price drops they have been benefitting from for several months. Only British Gas has passed on some of the huge savings to customers, with a 5 per cent price cut coming later this week.

But that – along some other small price falls for consumers – seems a drop in the ocean, compared to the huge drop in the price the energy companies are paying for gas and oil.

“One of the biggest concerns for the elderly and those on lower income is whether they can afford to heat and eat this winter,” says Unite assistant secretary Steve Turner.

“It’s pretty poor when the most that can be managed is to tell those with least access to the internet  – the vulnerable, the poor and the elderly – to get online and shop around.

“The Tories will never stand up for working people against the big energy firms. Once again the wholesale costs of gas have fallen and are now reaching record lows, having fallen for months.

“The companies must be forced into passing the full savings to customers by cutting prices now. Why let them get away with months of filling their pockets with the savings they are making before passing on limited price cuts?

“Companies put shareholders before profits. That’s one reason it’s time to bring our energy back under public ownership”.