A million households will have their energy bills reduced after one of the fastest-growing suppliers bucked the recent trend for price increases.
Bulb, the UK’s eighth biggest energy supplier behind Ovo Energy and the big six, said it was cutting gas prices by 2%, or £20 a year, bringing an average annual dual-fuel bill to £1,000.
That is more than £250 cheaper than the new default tariffs of the largest suppliers, which have all announced price rises from 1 April to £1,254 – the maximum allowed under the government’s price cap.
Although wholesale energy costs rose last year, they have begun to fall in the past few months. Bulb is the first large supplier to pass those savings on to consumers.
The company said wholesale gas prices had fallen by 12% since December because relatively mild winter weather resulted in gas storage staying at healthy levels. Electricity prices have fallen by the same amount, as nearly half of the UK’s electricity supplies come from gas power stations.
Amit Gudka, one of the firm’s founders, said: “Happily, the cost of supplying gas has continued to come down and we’re now able to drop our gas rates. Due to increased network and policy costs for electricity, we aren’t able to drop our electricity rates at the same time.”
The company raised its tariffs three times last year, blaming wholesale costs.
The energy regulator, Ofgem, said recently that wholesale prices had started to drop more dramatically at the start of February. If that trend continued, there was a reasonable chance the price cap would be lowered in October, said its chief executive, Dermot Nolan.
Bulb also announced it had hit the symbolic milestone of 1 million customers. That compares with 1.5 million at Ovo Energy, the largest challenger to the big six, which has grown rapidly after acquiring more than half a million customers from failed rivals.