CONSUMERS were today given hope that their energy bills will fall in the New Year, after Scottish Power cut the cost of one of its tariffs by 10 per cent.

Consumer groups said it was the “shape of things to come”, with reductions of 10-15 per cent expected across the board in the coming months.

Scottish Power cut the cost of gas on its Price Sure fixed energy plan from today. Even though the plan is fixed, existing as well as new customers will benefit from the reduction, which will bring the average bill down by £81 from £1,210 to £1,129

Will Marples, energy expert at comparison firm USwitch.com, said: “We expect suppliers to take a cautious approach to bringing household energy prices down. They will be concerned that wholesale prices could move upwards again, eating into margins and leaving them exposed.

"To mitigate this risk, they are likely to opt to introduce cuts in two stages, making an initial reduction of 10 –15 per cent in the run up to spring 2009, followed by a second cut of a similar or smaller level later on in the year if wholesale prices remain low.”

Wholesale gas and electricity prices have fallen by 40 per cent from their 2008 peaks, as oil has plummeted from a high of $147 in July to around $40 at the end of the year.

However, crude has rebounded in the past week as the Israeli attacks on Gaza have raised tensions in the Middle East, and as the row between Russia and the Ukraine over gas supplies has escalated.

Russian gas monopoly Gazprom cut off gas supplies to Ukraine on January 1 in a dispute over debts – a worry for European consumers who depend on Russia for a quarter of their natural gas. Flows to Greece have been slashed by a third and supplies to Bulgaria and Croatia were also reduced today. This could limit energy firms’ willingness to pass on last year’s price falls, consumer groups said.

Joe Malinowski, founder of energy price comparison website TheEnergyShop.com, said: “In terms of gauging the size of a potential cut it is worth noting that even after recent sharp falls, wholesale prices are still higher than they were at the beginning of the year.

“Having said that, our analysis of forward wholesale prices and energy suppliers’ costs suggests that there is scope for a cut of 15 per cent on standard gas prices and a 10 per cent cut in electricity prices.”

Uswitch has calculated that a 10 per cent cut in both gas and electricity prices would shave £129 off the current average bill of £1,293, taking it down to £1,164.

This would still leave bills £252 or 28 per cent higher than the average £912 households were paying at the beginning of 2008.

“The prospect of £129 coming off the average household energy bill within the next few months is welcome, but moving to a competitive energy plan could save up to £350," said Marples. "More importantly, this is something consumers can do for themselves today."

Malinowski agreed consumers should not wait for further cuts. “If history tells us anything, itis that you could be waiting some time,” he said. “Instead, customers on standard tariffs can already save more than the likely price cut by switching to British Gas’ WebSaver 1 tariff. This not only guarantees an immediate saving but also further savings if British Gas cuts its standard prices by more than 5 per cent. That’s the deal to go for.”