Npower Gas Price Reduction of 6.8% Announced

Now npower have also reduced their UK homes gas prices which means a reduction of 6.8% for the average home owner.

The third major energy provider has reduced their gas prices this week. Npower have announced a reduction in prices of an average 6.8% (previously Eon reduced their gas prices by 6% and southern electric by 7% – last month British Gas took the lead and reduced their prices by 7% and now everyone is following their lead).

What does it mean as an Npower customer ?

Only gas prices are being reduced at the moment but if you are on any of the variable rate tariffs including the capped gas product range or a juice tariff then you will see the reductions. The overall changes that are being made are as follows :

• Single fuel – ie: gas only – by direct debit – 10.4% reduction and if you pay a paper bill by other means a 6.1% reduction
• Dual fuel – ie: gas and electricity will see an overall reduction of 7.3% if you pay by direct debit and 6.8% if you pay the bill on demand

The reductions are lower on dual fuel rates because the price changes are only for gas supplies and these calculations have been worked out based on an average annual gas consumption of 20,500 kwh. All these changes are effective from 26th March 2010 which is in line with the other energy companies (rather than processing the changes immediately like British Gas did these changes come into force once most of the cold winter weather has receded).

Direct Debit Discount Changes

There are some changes to the bonus discounts when you pay on direct debit. These discounts are applied if you pay for your npower supplies for at least a year and the discount is applied to your bill after 12 months.

• Previous discounts were £20 each for gas and electricity as a single fuel tariff and an additional £60 if you took the dual fuel tariff
• Now the discounts are £50 for gas, £40 for electricity and an additional £10 for taking a dual fuel tariff (so the bonus of a dual fuel tariff has mainly disappeared but the discounts for a single fuel supply have greatly increased so if you are an npower customer it really make sense to pay by monthly direct debit).

Not all Tariffs are Changing

The main change are on the standard type of variable prices products for gas supplies so some of the npower tariffs are not affected by this reduction in prices and these are as follows:

• Fixed price tariffs – of course these will not change because the prices are fixed for the entire length of the contract you have taken out. You can switch out of this tariff if you have it but there are small exit penalties to pay
• Social tariff – there are no reductions on the social tariff as this is seen as a low discounted rate in any case

Our view

This is great news for npower customers and follows on from the other reductions made. However, we still recommend British Gas as a supplier as their rates are still some of the cheapest, they reduced their prices first in this current round of price changes and they introduced the cuts immediately as they announced them.