Energy price war on the cards after Bord Gáis move

The first salvos in what could be an energy price war have been fired by Bord Gáis Energy.

The company has announced plans to shave 2.5 per cent of its residential gas prices in a move which will see the average consumer making an annual saving of just over €20. It also announced its intention to cut its unit rate of electricity by a further 2 per cent which will lead to electricity bill savings of €24.34 a year on.

A consumer who gets both their gas and electricity from the company, then, will see their annual energy bill fall by €44.59.

While the savings are modest they come on the back of separate price cuts the company rolled out earlier this year. All told its customers will pay just under €100 less for their energy over the next 12 months.

The price cut announcement comes into effect from October 1st, 2015 for the company’s 326,000 residential gas customers and its 277,000 electricity customers.

The Minister for Energy, Alex White welcomed the announcement and he expressed the hope that other energy suppliers will follow its lead. "It is hugely important that consumers shop around to ensure that they get the best price," he said. "I would encourage all consumers to do so. Even if consumers don't want to change supplier they can call their supplier and seek the best available package on offer."

Earlier this year Mr White held a series of meetings with the energy suppliers to discuss the speed with which wholesale energy price reductions were being reflected in household bills.

Most suppliers reduced their prices earlier this year and suggested further prices could be possible this Autumn if market conditions allowed.

"The announcement of a second price cut from Bord Gáis Energy is good news news for energy customers," said Eoin Clarke, managing director of independent price comparison website. Switcher.ie.

He said this “second wave” of Bord Gáis Energy cuts would “not only help cash-strapped consumers, but it will also put pressure on other energy suppliers to pass on wholesale cost savings to their customers. Suppliers who are refusing to reduce bills further have a lot of explaining to do.”

As things stand there is a €334 a difference between standard tariffs and the cheapest deal on the market. “We encourage customers to switch and save money before their energy consumption increases in the colder months ahead,” Mr Clarke said.