Energy bills fall but savings swallowed by last year's rises Published on Friday 13 January 2012 00:18 SCOTTISH Gas and SSE have followed EDF Energy's lead by slashing energy bills, but critics warn the reductions will not make up for earlier price hikes faced by consumers. Scottish Gas announced an average 5 per cent drop in its standard electricity tariff. The Centrica-owned company's price cuts will see the energy bills of more than five million people slashed, when British Gas customers are also taken into account. The price cut will take effect immediately and will knock £24 from the average bill, meaning a customer on a dual fuel tariff will pay an average of £1,189. However, there will be no reduction in its gas price. And critics pointed out it follows a decision to increase gas bills by 18 per cent and electricity by 16 per cent in August last year. Following the announcement by British Gas yesterday, Southern Electric and Swalec owner SSE said it would cut the price of household gas by 4.5 per cent from 26 March. SSE said around 3.5 million households in Britain will benefit from its reduction, which will cut typical gas bills by around £28 a year. SSE increased household gas prices by 18 per cent and electricity by 11 per cent in September. On Wednesday French-owned rival EDF cut its gas prices by 5 per cent. The rest of the big six energy companies are now under pressure to follow suit. Ann Robinson, director of consumer policy at uSwitch, said: "The bottom line for consumers is that these cuts will go nowhere near cancelling out the £224, or 21 per cent, hike in prices they've seen in the last 18 months. We can only hope that these reductions are the first and more will follow. She added that it was disappointing that none of suppliers had announced cuts for both gas and electricity. While British Gas customers will benefit immediately, EDF Energy's cuts will not come into force until February and SSE prices will not drop until the end of March - towards the end of winter. Mark Todd, director of the independent price comparison service Energyhelpline, said: "We believe there is room for price cuts of up to 10 per cent because of the recent dramatic falls in wholesale prices but clearly the major suppliers do not feel they have the necessary leeway to go much further than 5 per cent. This may be because they are worried about their profits but also because they genuinely think that wholesale prices could go back up and that investment in green energies is limiting their room for manoeuvre. Richard Lloyd, executive director at Which?, said: "With average bills now more than £1,300 a year, small reductions of around £30 will not be a solution for those struggling to pay their next bill." British Gas claimed the price reduction meant it now offered the cheapest standard electricity, on average, of any major supplier and added this will save customers more than £100 million. Ian Peters, managing director of energy at British Gas, said: "Household budgets are stretched and we are doing everything we can to help our customers keep their bills down." And Alistair Phillips-Davies, SSE'S generation and supply director, said: "I hope that this will give our customers some respite from the seemingly endless rises in household costs that we have seen in recent times."