Gordon Brown has come under pressure to force energy suppliers to pass on falling gas and oil prices to hard-pressed households.
Motorists have already benefited from a slump in the cost of oil, which dropped to $66 a barrel earlier this month. Last week Morrisons kicked off a petrol price war by dropping the cost of unleaded to less than £1 a litre for the first time since December 2007.
Now the prime minister has been told by MPs to make sure that lower wholesale prices paid by suppliers for gas and electricity are passed through to customers.
Oil price link
Wholesale gas prices are closely linked to oil prices and in the UK this also affects electricity prices because so much of the UK’s electricity comes from gas-fired power stations.
Speaking at Prime Minister’s question time yesterday, Mr Bown told MPs: ‘Now that the price of oil is coming down and the price of gas is coming down, we expect that to be reflected not just in petrol prices coming down but we want to see it reflected over time in the way gas and electricity bills go to consumers.’
John Holmes, principal economist at Which?, said: ‘More transparency is needed to explain the link between the wholesale prices that suppliers face and the price that consumers pay. A recent survey found that only 12% of Which? members thought their supplier had done everything it could to avoid raising prices.’
All of the big six gas and electricity suppliers have hiked prices twice this year – meaning household energy bills have increased 38% during 2008 alone. A recent survey by Which? found that customer satisfaction with energy suppliers was the lowest of all industries covered by its satisfaction surveys.
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