OVO Energy cuts prices by 4.5%

by Matt Ridout on 29 June 2012  |  7 comments
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One of non-big six providers has cut its energy prices. But don't expect the big boys to follow suit.

Small energy supplier Ovo Energy has announced a price cut that affects both of its fixed price tariffs, New Energy and Green Energy. The drop, which averages to a cut of 4.5% per cent for dual fuel has been implemented today and is applicable to both new and returning customers.

What most of us will be wondering is whether Ovo’s announcement trigger a domino-effect amongst the industry? With smaller suppliers such as Ovo often the first to institute price changes, this is indeed a valid question. However, according to industry insiders consumers should not immediately get their hopes up of industry-wide price cuts.

It’s important to realise that on the whole, the cheapest deals are still £24 more expensive than they were in January this year. Even Ovo’s cheapest price is also £27 more expensive than in January. This means that standard prices are still more likely to rise next than fall.

The energy market is really volatile at the moment and whilst wholesale prices have been in slight decline lately, the tide could easily turn and consumers should be prepared for possible rises in the run up to winter.

The smartest move for most of us is to conduct a price comparison to see if you could shave hundreds from your annual bills. With many still paying far too much on standard tariffs it is always good advice to compare and switch to get the cheapest deal possible. Below are the cheapest deals in the market today.

* against typical bill of £1,345 per year as estimated by Ofgem. All costs are for a yearly average usage dual fuel household paying by monthly direct debit. Average usage defined by Ofgem as 16,500 kWh p.a. of gas and 3,300 kWh p.a. of electricity.

Compare energy tariffs with lovemoney.com.