Energy giant E.ON cuts gas prices

E.ON customers will see their gas bills cut, the energy giant announced

Around 1.8 million E.ON customers will see their gas bills cut by 3.3% - saving them around £25 a year, the energy giant has announced.

E.ON said the gas price reduction, which follows a 9% decrease for electricity tariffs on March 31, would take effect on Saturday.

It is also scrapping the standing charge for gas prepayment in a move affecting more than 200,000 meter customers.

The removal of the standing charge for meter gas customers follows a pledge by the firm to scrap it late last year. UK utility groups have been slammed in recent months over their treatment of prepayment customers amid claims they have overcharged those on meters.

The National Housing Federation said last week that households who use prepayment meters have been overcharged by nearly £500 million a year in the past three years. Energy regulator Ofgem reported last October that it believed the market was not working well for all customers, with those on prepayment deals in particular being affected.

E.ON, which has a total of 5.5 million UK customers, said it was "committed to offering competitive prices at all times and delivering on our promises". Switching service energyhelpline said E.ON's announcement was a "step in the right direction".

But it comes after E.ON hiked gas prices by 45% and electricity by 27% last year, according to energyhelpline. Mark Todd, energyhelpline director, said: "At last here is some welcome news for consumers from one of the big six energy providers.

"E.ON's pricing decision is further proof that activity in the UK energy market should continue to lead to price falls, not price rises. We do not expect to see any big price drops on standard tariffs as these are reserved for switchers opting for internet tariffs.

"However, further small price drops are likely to trickle through from other suppliers throughout the summer and autumn."

Wholesale energy prices have plunged since last year's oil price bubble burst. However, E.ON said wholesale costs were still 60% higher than they were two years ago.