Monday, 8 February 2010
Who is fuelling who?
British Gas have announced a price cut of 7% which could see the typical household bill being reduced by hundreds of pounds as well as triggering a price war with the energy giant’s competitors. There is speculation that we could see prices fall even further over the coming months.
Great news for the consumer? Yes, but why has it taken so long to come about and why is the cut so paltry? The wholesale price of gas fell over the last 18 months at a staggering rate. According to an independent energy analyst, the wholesale price of gas on the day of the price cut was 35p a therm – about one third of the price of 100p a therm in mid-2008. A year ago, the price was 60p a therm.
These figures put the 7% British Gas price reduction, the first in those 18 months, into context. Meanwhile Centrica, the owners of British Gas, is making hundreds of millions of pounds in profit every year. Centrica are predicted to have profited by an extra £40 million to £50 million during the recent cold snap alone.
Meanwhile more and more pensioners are dying in the winter because they cannot afford to heat their homes. Families on low incomes have also been badly affected. Figures from the National Statistics Office show that there was an estimated 36,700 more deaths between December and March 2008/09 compared with the average for the non-winter period. What will the figures look like after this year’s harsh winter?
Plaid Cymru has argued for the need to introduce a living pension as part of the UK General Election campaign, which would go some way to off-set high fuel prices.
On the day of the 7% announcement, British Gas’s Managing director, Phil Bentley, said: “I'm pleased we're able to offer our customers some extra help with this gas price cut - and that we're able to do this while it's still winter, allowing our customers to really feel the benefit.”
Why couldn’t you have done that last winter Mr Bentley?