Energy suppliers are passing on the benefits of cheaper wholesale prices to new customers, as the cheapest tariffs on the market have dropped by £32.60 since the beginning of February, according to data analysed by comparethemarket.com.
The impact of the fall in wholesale gas prices has taken time to filter though into the amount households pay for their energy. The average price of the top 20 energy market tariffs at the end of February 2020 was £831.80. By the end of March the average price had fallen slightly by £7.40 (0.9%) to £824.40. Since the beginning of the month the average price of the top 20 tariffs has dropped to £799.20, a further price reduction since of £25.20 (3.06%).
The average price for the cheapest available tariffs is at its lowest level in more than three years. However, millions of households stuck on uncompetitive variable rate tariffs are potentially paying over the odds. The current price cap level of £1,162, that came into effect on the 1st April, is £411 more expensive than the cheapest dual-fuel fixed-term tariff currently on the market.
Peter Earl, head of energy at comparethemarket.com, said “It appears that suppliers are finally passing the fall in wholesale prices on to consumers. Whilst it has taken some time for cheaper wholesale prices to filter downstream, as prices for energy often fluctuate, the sustained period of lower prices has resulted in some very competitively priced tariffs for consumers.”
“At a time when many households are worried about the cost of energy, this reduction in prices may offer a helpful way for people to reduce their monthly outgoings. For households struggling to afford their energy bills, the government has rightly promised that no one will face their supply of energy being cut. Households finding themselves in a difficult financial situation, especially vulnerable customers, should contact their energy provider for additional support.”