Irish consumers look set to be the winners from an energy price war after two of the smaller utilities offering domestic electricity and gas announced price cuts in the wake of falling oil and gas prices on international markets.

The wholesale cost of natural gas has fallen by close to 30 per cent over the last 12 months as a warmer than normal winter and increased supplies of gas have pushed prices down. The price of a barrel of oil has hovered at the $58 mark this week, the lowest level for crude since May 2009.

Lower prices internationally have given companies – which have pushed energy prices higher repeatedly over the last four years – room to manoeuvre, at least when it comes to enticing new customers. Energia has announced it will increase the discounts open to new customers by 1 per cent to 17 per cent on electricity and 16 per cent on gas. It said the average household would be able to save €307 a year – the equivalent of a day's free energy every week.

Pricing strategy

Energia head of marketing

Geoff Codd

said its aggressive pricing strategy since it entered the domestic market in January had seen thousands of people switching to the company each month in 2014.

Flogas does not offer electricity as part of its bundle but as part of its gas offering, domestic users who make the switch before the end of February will be able to knock 20 per cent off the standard rate.

The offer positions Flogas as the cheapest natural gas option for residential customers according to price comparison sites bonkers.ie and uswitch.ie, both accredited by the Commission for Energy Regulation.