E.ON has become the latest gas and electricity firm to announce a price drop after four other major suppliers cut prices last week.
E.ON has announced a reduction of 6 per cent in standard electricity prices, which will take effect from 27 February.
The energy giant says 75 per cent of its customers will benefit from the price cut, which will knock £31 off the average annual electricity bill.
E.ON’s price drop follows a rise of 11.4 per cent in August 2011.
The move follows a flurry of price cuts from E.ON’s competitors in reaction to a fall in gas and electricity wholesale price.
Industry price cuts
On Friday, npower announced a 5 per cut in gas prices.
Last Thursday, British Gas announced a 5 per cent cut to electricity prices with immediate effect and said the average electricity bill would drop by £24.
On the same day SSE announced a price cut of 4.5 per cent on gas from 26 March.
And last Wednesday, EDF Energy became the first of the UK’s big six suppliers to lower prices slashed gas prices by 5 per cent.
Fall in wholesale prices
E.ON chief executive, Dr. Tony Cocker, said: “We understand that household bills are the most pressing concern for families across the country.
“Reductions over the last few months in the wholesale price that we pay for our customers' energy have now allowed us to help as many of our customers as possible by cutting our electricity price.”
But the company also issued a note of caution.
De Cocker said: “Whilst we're pleased to pass on this recent slight fall in wholesale prices, most experts agree that global energy prices will continue their long-term rise.”
Complacency warning
Lisa Greenfield, energy analyst at Confused.com said the latest prices drop was good news for consumers.
She said: It is good news that E.ON has followed suit.
“Of the Big Six suppliers we’re just waiting for Scottish Power to lower prices now.
“Scottish Power was the first to raise its prices last summer, so it doesn’t look great that it’s the last to lower prices.”
Greenfield added that despite this current round of price drops, customers should not be complacent about their energy bills and should continue to shop around for the best quality provider and the best price.
