Shares in British Gas owner Centrica (LSE: CNA) (NASDAQOTH: CPYYY.US) and fellow energy provider SSE (LSE: SSE) (NASDAQOTH: SSEZY.US) lifted in early trade this morning, following announcements stemming from the government’s pledge to cut energy bills.
Centrica stated that British Gas energy bills are to be reduced on average by over £50 — broken down to £41 (average) off the annual dual-fuel bill, and an additional £12 customer rebate for the government’s Warm Home Discount (WHD) scheme.
Meanwhile, SSE confirmed that it will “pass any resulting savings [from proposals to reduce the future costs associated with the Energy Company Obligation] on to customers before the end of the current financial year”. Management estimate an average saving off an annual dual-fuel bill of around 4%, circa £50.
Price reductions are likely to take effect from 1 January 2014, with Centrica managing director Chris Weston commenting: “While this price cut will be welcome news this winter, we will continue to do everything we can to help customers reduce their energy consumption and keep their energy bills as low as possible.“
The cuts come after many energy companies announced hikes in their tariffs due to rising costs stemming from the likes of higher wholesale commodity prices, with Centrica previously revealing increases of 9.1% and SSE of 8.2%.
