- -Wholesale gas trading at 37.5 per therm, down from 70p in December
- -Mild winter this year means gas stores are almost full already
- -Critics say household energy bills 'rise like a rocket and fall like a feather'
Energy companies today came under to cut household bills after a dramatic fall in the price they pay for gas.
Wholesale gas prices have almost halved since the start of the year, after one of the mildest winters in recent times.
But utility firms claim they cannot pass on the savings because they need to protect themselves against Labour’s price freeze if Ed Miliband wins the next election.
The price energy companies pay for gas on the wholesale market has fallen from around 70p per therm in December to just 37.55p yesterday
Families have seen bills continue to rise this year, but falling wholesale gas mean the energy companies are making bigger profits.
Wholesale gas was being traded at 37.55p per therm yesterday, down from around 70p in December.
Experts said the mild winter mean gas stores which would normally be running low at this time of year are almost full.
Last year, after freezing temperatures in March and April, the price surged to more than £1 per therm.
The spike was blamed by energy companies for their round of price hikes announced in December.
But with wholesale prices not tumbling, there is little sign of them passing on the benefits to customers.
Ann Robinson, director of consumer policy at uSwitch.com, said: ‘We know when wholesale prices go up, bills go up like a rocket but when wholesale prices come down, bills come down like a feather.
Labour leader Ed Miliband has promised to freeze bills for 20 months if he wins the next election
‘We only tend to see prices go one way, they rarely come down. That’s why we are saying something must be done.
‘The energy companies are saying they have bought their gas in advance because of concern about Ed Miliband’s policy of a price freeze.
‘But these companies trade all the time. In my view this is not a good enough reason for not passing the benefits of low wholesale prices on to customers.’
Labour has promised to impose a 20-month freeze on bills if it wins the general election in 2015.
When Mr Miliband announced the plan in September last year it proved hugely popular with voters fed up with spiralling costs for heating and lighting their homes.
Energy companies claim they have bought gas supplies ahead for the next two years, to protect themselves against rises in wholesale costs during Labour’s freeze.
But Labour dismissed the claims, insisting there was 'no excuse' for not passing out savings.
Shadow energy secretary Caroline Flint said: 'Yet again it looks like energy companies are up to their old tricks while David Cameron does nothing to stop them.
'When wholesale prices go up, consumers’ bills rise, but when wholesale costs come down consumers never see the benefit.
'Last month Labour revealed that the energy companies had failed to pass on the full savings from the Government’s changes to green levies to millions of their customers too.
'There is no excuse for energy companies failing to pass on these savings. That’s why Labour would implement a price freeze until 2017, which would prevent energy companies from increasing their prices anymore, but not stop them from cutting their prices. Labour will also give the regulator the power to force companies to cut their prices when wholesale costs fall, if they don’t do it first.'
Trevor Sikorski, head of natural gas at Energy Aspects, said: ‘Demand is low at the moment. This year we didn’t have a really cold spell. We didn’t see snow in most parts of the country.
‘What has happened is European storage facilities are really, really full for the time of year. They would usually spend the summer filling those up.
‘What we tend to see with the utilities is prices are 'sticky downwards'. They rise prices faster upwards than they do downwards.
‘Barring a Russian disruption, we would say we are in for pretty low prices this summer. We would hope toward the end of the summer we would see some reduction in retail prices.
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