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Scottish and Southern Energy (SSE) has announced an average 4% reduction in standard gas bills from the end of the month.

But energy experts said the timing of the move, after the worst winter for decades, showed that companies cared more about their shareholders than their customers.

Wholesale gas prices have plunged, leading to accusations that the big six providers have failed to pass on cuts quickly enough to struggling consumers.

Despite SSE’s latest cut, which will come into effect on March 29, its customers are still paying £287 – or 33% – more than they were at the start of 2008.

The company, which operates as Scottish Hydro Electric north of the border, has 3.5million gas customers but nearly 10million customers across the UK who use gas or electricity or both. Electricity prices will remain unchanged.

SSE said the bills for the average customer would reduce by 4%, or £30.

Pre-payment gas customers will benefit from an average reduction of 9%, or £70, although typical pre-payment bills in Scotland will go down by 11%.

The company has also removed the extra charges levied for “single” fuel gas customers that will see their bills drop by an average of 7%, or £56.

The announcement comes after British Gas cut its standard gas bills by 10% last month – the first of the “big six” energy groups to reduce tariffs since last year.

There have been calls for widespread energy cuts after bumper annual profits revealed by major players in recent weeks.

Centrica said its residential British Gas arm notched up a 58% leap in profits last year, while Scottish Power’s earnings rose by 7.9%.

SSE said its changes would see the fixed amount charged for the first 1,143kWh of gas used rise from £53 to £98, including VAT.

Gas used beyond this level will be reduced by at least 11%, giving a net effect of a 4% reduction in the typical bill, according to SSE.

After these changes, the average “dual fuel” standard credit bill will be £1,162 a year, it added.

Alistair Phillips-Davies, energy supply director of SSE, said: “We believe this is a responsible package of measures which confirms that SSE is one of the country’s most competitive energy suppliers.”

Energy consultancy McKinnon & Clarke, one of the largest purchasers of energy in the UK, described the cut as “a token gesture”.

David Hunter, the firm’s energy analyst, believes gas and electricity prices should have been cut by 10% to match falling wholesale prices.

He added: “This 4% on gas alone is well short of a fair deal for customers.

“We are very disappointed, but not slightly surprised, that the cut comes in from the end of March once the peak heating season is over – demonstrating once again the priority of shareholder dividends over customers struggling to pay heating bills.

“The big six energy companies need to make a profit, but this is losing perspective.”

Price comparison firm Energyhelpline said the cuts were a “drop in the ocean”.

Director Mark Todd said: “Most SSE customers will save either £30 a year or nothing because they are dual fuel users or electricity-only customers.

“The reduction also doesn’t come in until the end of March – unlike the recent British Gas cut which was immediate.

“There should be plenty more gas in the tank at SSE for further falls and we would urge them to make more meaningful price cuts.”

Uswitch said consumers still faced a battle to get a good deal.

A spokeswoman said: “Although these reductions are welcome it’s important that consumers don’t become complacent.

“Energy prices are still far higher than just a couple of years ago and the price cuts we’ve seen to date are not going to make up this ground.

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“Prices increased by 42% or £381 in 2008 and suppliers cut prices by 4% or £54 last year.

“Even taking into account cuts this year, we still expect household energy bills to end up around £300 higher than two years ago, putting even more emphasis on the need for consumers to start managing their energy costs.”

Robert Hammond, energy expert at Consumer Focus, welcomed the price shift.

He said: “This is good news and hopefully will spark the price war that has been conspicuous by its absence since British Gas cut its gas bills last month.

“Wholesale gas and electricity prices have been falling for months and we believe price cuts for both should have been passed on before the winter started.”

Norman Kerr, director of fuel poverty charity Energy Action Scotland, said: “Any reductions in costs, whether in gas or electricity, is good news for consumers in Scotland.

“We have a much harsher climate than the rest of the UK, so it is fair that the reduction is larger here.”
 

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