Pressure on profiteering energy firms begins to work
Profiteering energy firms are getting the message.
Energy Minister Alex White heeded a call made in this column last week for him to drag in the chief executives of the electricity and gas suppliers and press them to cut their prices.
And the finger-wagging has already worked - just days before the energy company chief executives are due to sit down with the minister and attempt to defend the indefensible to him, Bord Gais Energy said last week it will cut gas prices for all its customers by 3.5pc from March 16, and cut electricity prices by 2.5pc from the same date.
Bravo, and well done to BGE and to the minister.
But there should be bigger cuts, and the other players have to follow suit now.
Energy firms have benefited hugely from the plunge in wholesale gas prices, down around 16pc in the year.
They were quick to pass on higher commodity prices in the last few years - but have been slower to act when the need for a price cut is on the agenda.
In little more than three years, standard gas prices have gone up by 36pc and electricity prices have gone up by 22pc.
These hikes have added nearly €500 a year to average bills of families since 2011.
Blame for these extraordinary increases was attributed to oil and wholesale gas costs rising. And the increases for households came soon after the rises in commodity prices.
So when it comes to the fall in prices, the energy companies have, until now, been remarkably reluctant to give householders a break. Bord Gais has now announced small cuts, on the back of a 2pc reduction in electricity prices from Electric Ireland that took effect in November.
But we need more. Other companies should reduce their prices, and Bord Gais should decrease theirs again. Most people will have used the bulk of their winter gas by the time the Bord Gais reductions come into play around St Patrick's Day. Energy companies argue that discounts of up to 20pc are available for switchers.
But only one in six households ever bothers to change supplier.
Energy companies never tell you when your switcher deal is up, and just move you back to their high standard prices.
The energy regulator should force firms to notify households three weeks before their time-limited deal comes to an end.
The Minister has no role in regulating prices. That is the preserve of the Commission for Energy Regulation (CER).
But the CER has decided that firms should be allowed to set their own prices, now that both Electric Ireland and Bord Gais are no longer dominant in the market. But standard tariffs remain high.
Mr White has made a good call, but he will need to demand more reductions.
Sunday Indo Business