Airtricity cuts could spark price war

A price war is looming after SSE Airtricity became the second energy supplier in less than a week to announce gas and electricity price cuts.

The company has confirmed it will reduce its household prices for new and existing customers by 4% for natural gas and by 2% for electricity. The price cuts will come into effect from April 1 and will apply to around 440,000 household customers.

The move comes just days after Bord Gáis Energy will cut its domestic gas prices by 3.5% and its electricity prices by 2.5% from March 16. Electric Ireland introduced an electricity price cut of almost 2.5% in November.

SSE Airtricity said the changes will mean an average annual gas bill will come to €919 — a saving of €35 on current rates. The average annual electricity bill will come to e €1,206 — a saving of €23.

Managing director of SSE Airtricity Stephen Wheeler said the company has always been committed to reducing prices for customers where possible.

“At SSE Airtricity we are committed at all times to delivering energy cost savings to all our customers. Our approach to buying energy on wholesale markets ensures we can offer prices to customers that are both competitive and stable. We’ve always made the commitment that if we can lower prices, we will,” he said.

The raft of price cuts among energy suppliers come amidst mounting public anger that the large drop in wholesale oil and gas prices over the past year is not being passed on to customers in the form of lower tariffs.

Energy Minister Alex White welcomed the announcement and said he has already begun a series of separate meetings with the chief executives of energy companies to discuss the speed with which wholesale energy price reductions are being reflected in household bills.

However, Eoin Clarke, head of switching company uSwitch.ie, said that while any price cuts for consumers were welcome, “single-digit price reductions fall short of the double-digit fall in wholesale energy prices”.

Crude oil prices more than halved last year to a nine-year low of less than $50 a barrel, while wholesale gas prices have fallen by more than a quarter.

Mr Clarke said the best way to force energy suppliers to cut prices was to shop around and switch to suppliers that offer the best value for money.

“Switching suppliers is still the quickest way to save money. There is an incredible €307 per year difference between the best deal on the market and the average standard tariff — so customers should shop around to check that they are on the best tariff.

“All eyes will now be firmly on Electric Ireland, Energia and Flogas to follow the lead of Bord Gåis Energy and SSE Airtricity, and cut their prices to help hard-pressed consumers with energy bills,” he said.