Household gas bill cut unlikely this year
Household gas prices are unlikely to fall until early next year and will only be cut then if wholesale costs continue to weaken over winter.
Centrica profits rise 40%Oil prices have slumped by more than 50 percent since hitting a record in July of close to $150 a barrel.
Petrol pump prices have started to fall too, sparking calls for the utilities, which blamed oil prices for big gas bill increases earlier this year, to cut prices soon.
But big energy companies argue they bought the gas to supply their customers this winter before the peak in oil markets and that they only passed on a fraction of the wholesale price rises in the run up to it.
Since then, the decline in wholesale gas prices has been far less dramatic than the falls in crude and would have to continue through winter before the utilities pass on any savings to customers.
"The reality is that wholesale gas is not falling in the way that oil is and the disparity between the increase in price at wholesale and the increase in price at retail is still huge," a spokesman for RWE npower said.
"What we are hoping is that we will see wholesale gas start to come down to the point where we can make some reductions."
Even if wholesale gas prices continued to fall, if suppliers take as long to cut retail prices as they did to put them up it would be spring before gas bills shrink again. Scottish Power - which along with EDF Energy was criticised by energy regulator Ofgem for not passing on lower wholesale costs quickly enough in early 2007 - also said it had passed on only a small part of the increase in wholesale prices from late 2007 and that it was too early to cut again.
"Thankfully there has been a short-term reduction in wholesale energy costs, but the wholesale gas market remains exceptionally volatile," a spokesman for the company owned by Spain's Iberdrola said.
"To help shield our customers against the worst of this volatility... we purchase gas through a series of contracts in advance for fixed periods of time."
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