At the beginning of February 09, the Organisation for Economic Co-operation and Development (OECD) released figures that indicate the major energy providers of Europe have increased the energy prices in the UK much more than they have in their home countries over the course of the last year. This means that where we have seen energy inflation figures of over 12%, other European countries have actually seen their prices fall and there doesn’t seem to be a lot we can do about it.

Few people know that most of the biggest UK energy providers are foreign companies and that British Gas and Scottish & Southern Energy are the only UK registered energy providers around. For example, nPower and E.on are German companies, EDF is French and Scottish Power is Spanish and all of these European countries have seen their energy prices fall over the last 12 months. Figures show that with regards to energy prices, Germany saw cuts of nearly 1%, France of 6.5% and Spain over 7% in the same time period that we saw increases of over 12%.

Strangely though, the wholesale price of gas has fallen by over 40% since the middle of last summer but it is only now that we in the UK are beginning to see cuts in our energy prices – and in some cases this is only because British Gas and Scottish & Southern Energy have announced their price cuts. Recently, British Gas pledged to reduce their prices by 10% and as a result a number of the other large providers have followed suit. The question is though, would the German, French and Spanish companies have introduced similar cuts had British Gas done nothing?

Many experts say no and that the European companies would have continued to charge high energy prices in the UK so that they could keep the prices low within their own countries. They also say that is was simply the competition with the UK suppliers that spurred them into action but who knows what their intentions were in the long run – we should just be happy that they are starting to bring our prices back down.

Saying all this though, it seems that the figures are a little misleading and that we in the UK actually pay less for our energy than the rest of Europe and even with the inflation we still pay less. This is neither here nor there though and it makes you wonder what we could be paying if we had seen the same price cuts as the countries mentioned above. Most of the big energy suppliers have now announced their price cuts to the general population and over the course of the next year everyone should start to see savings, but the question remains – how much could we have saved by now if we’d seen the same degree of price cuts as everyone else in Western Europe last year?

Guest Article by Clare Lynock

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5. Gas Prices Down Across Board