A small energy firm has cancelled its upcoming price rise, a decision which has been welcomed by consumer groups.

Ovo, a small company based in Gloucestershire with 69,000 residential customers, has said that an upcoming 3.5% increase for 10,000 customers on a variable tariff rate will no longer happen. This is due to a recent fall in the wholesale price of gas.

Consumer Focus welcomed the decision and suggested that the larger energy suppliers should also look to reduce their prices, if this small company can.

In a statement, the Director of Energy at Consumer Focus, Audrey Gallacher , said: “This is a good sign and it throws down a gauntlet to the Big Six. Wholesale prices have been falling recently, and all suppliers should be looking at whether that provides an opportunity to bring prices down.

“A smaller supplier such as OVO may be able to react more quickly, but it obviously can’t operate on the same economies of scale as its much larger rivals. If it can cancel price rises because market fundamentals change, it begs the question why can’t others?”

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