Consumers will have to wait at least six months to see cuts in gas bills even after Britain was flooded with a free fuel supply yesterday.
Hopes of lower energy bills were raised when it emerged that natural gas was being given away on the wholesale market.
The dramatic fall in wholesale prices was sparked by a surfeit of gas pumped to Britain through the new Langeled pipeline from Norway.
But householders hoping for lower energy bills as a result were left disappointed when energy companies indicated that it’s likely to be six months before any price cuts filter through.
This is because domestic gas bills are based on the price of gas at the time it was purchased, and suppliers have already bought their supply of gas in advance, at higher prices, to meet winter demand. This means consumers will have to wait for reductions.
British Gas has already announced that it would recover the losses it made last quarter before passing on price reductions to consumers.
But regulator Ofgem has warned it will pursue gas companies who fail follow drops in wholesale prices by cutting customers’ bills.
Adam Scorer, Campaigns Director at consumer body Energywatch, said that energy companies in a competitive market ought to anticipate prices falling and pass on lower prices to consumers as early as possible.
The Langeled pipeline opened on Sunday and delivers gas from the Norwegian North Sea to Easington in East Yorkshire. It’s one of several projects aimed at boosting supply to the UK now that it is a net importer of gas due to dwindling stocks in the North Sea.
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