Energy provider Scottish Power said yesterday it would cut gas bills by an average of 8% from March 31.
The group is the last of the “big six” energy providers to reduce its gas tariffs this year as firms respond to sharply lower wholesale energy prices. About 1.6million gas customers will benefit from the reduction.
Scottish Power, which is owned by Spanish group Iberdrola, attracted criticism recently for failing to pass on wholesale price reductions more quickly when it revealed a 7.9% rise in earnings last year.
It has not reduced standard gas prices since early last year.
Scottish Power’s move will see its gas bills fall by an average of £66 a year.
According to independent consumer watchdog Consumer Focus, the group was the most expensive standard-payment gas provider before the latest round of cuts and remains the dearest despite yesterday’s announcement.
An annual single fuel gas bill will cost an average of £832 with Scottish Power after the March 31 reduction against £735 with E.ON, which will become the cheapest after its bill change.
Raymond Jack, Scottish Power’s director of energy retail, said while wholesale costs had been falling, less than 60% of a customer’s bill was now based on wholesale costs, with the remainder covering expenses for “investment, government obligations and the delivery of energy to the home”.
He added: “The gas we are using today was bought well in advance when prices were much higher.
“It is important that we do this to ensure we have sufficient supplies when customers require them and to protect customers from volatile spot market prices.”
Scottish Power is also offering a £50 winter rebate to help its most vulnerable electricity customers, which will be credited to their account by March 31.
Consumer Focus hit out at an apparent “pack mentality” between the providers to cut by similar amounts and within days of each other.
Audrey Gallacher, energy expert at Consumer Focus, said: “The energy market should be offering Premiership levels of competition – unfortunately it is kicking around in the lowest levels of Sunday League.
“Any hope is now gone of the genuine price war this market needs so badly.
“The shouts for an independent investigation by the Competition Commission should now be deafening.”