Holly Thomas Scottish Power reduced its fixed rate tariff by 10 per cent for gas customers, in the first of what is expected to be a wave of price cuts.
Oil prices have come down since last year which means suppliers should soon be passing on the cut in costs to customers.
But any reductions may come too late for householders paying high prices during the cold winter months.
Energy bills shot up last year when all the big suppliers hit customers with two price hikes. But a sharp drop in wholesale costs since the summer now paves the way for cheaper bills.
Will Marples, energy expert at 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 followed by a second cut of a similar or smaller level later on in the year if wholesale prices remain low."
Scottish Power's price cut has prompted experts to warn consumers not to sign up to these fixed rate tariffs which lock you into the deal for a fixed period. They are priced higher than the cheapest variable deals around, but come with the peace of mind you know what you’ll be paying for that period.
These are popular among families who like to budget, when gas and electricity costs are soaring. But with experts predicting prices are to start falling in the spring, variable rates may be more attractive for some.
According to comparison site Confused.com the two cheapest deals come from EDF and British Gas – the best one depends where you live. They cost on average 1,109.47 and 1,058.80 a year respectively.
A spokesman at the Energy Retail Association, which represents suppliers, said: "There needs to be a sustained fall in wholesale energy prices before we can see similar falls in the retail prices. A number of energy companies have reported that they are hopeful of future price reductions. Neither the ERA or our members will be able to say with absolute certainty when this will happen."
While the crisis in Russia threatens supplies to Europe, experts remain hopeful this will not delay price cuts.
* Holly Thomas is an award-winning financial journalist and Deputy Personal Finance Editor at the Daily Express and Sunday Express. Holly's views represent her own opinions and are for general information only. Always seek independent financial advice.