German energy group E.ON has announced a 5.1 per cent cut to standard gas bills for residential customers, putting pressure on other 'Big Six' providers to follow suit. In January last year a 3.5 per cent price cut to gas bills from E.ON prompted rival energy suppliers Centrica (CNA), SSE (SSE) and Scottish Power (SPW) to also introduce price cuts to their residential gas prices.
E.ON said the price cut was equivalent to £32 off the average annual gas bill. Regulator Ofgem and Prime minister David Cameron earlier this month expressed concerns that household energy bills were not falling in line with wholesale gas prices. Shares in SSE fell to a 12-month low following E.ON's announcement, due to concerns a similar move could erode supplier's profits. The effect of a warmer than usual December, resulting in lower energy usage, could also bite into revenue.
