British Gas is to cut household gas prices by 5% falling recent falls in wholesale prices – but the 6.8 million customers whose bills will fall will have to wait until the end of February to feel the benefit.
The firm, which is the second of the big six energy companies to react to falling wholesale prices, said its cut would reduce the average household bill by £37 a year. The drop will benefit customers on its standard tariff and those on its Fix & Fall tariff and will come into effect on 27 February.
The firms said most of the gas being used in customers’ homes had been bought at higher 2013/14 prices, but it was passing the falling costs it was seeing now onto consumers. It added that wholesale prices were volatile and it would be keeping prices under review for further movements up or down.
Iain Conn, the chief executive of British Gas’s parent firm Centrica, said: “We’ve been watching the significant moves in the international energy market extremely closely for some time, with the aim of helping customers with a price cut at the earliest possible opportunity. Operating in such a volatile market, no pricing decision is straightforward.
“We bear the responsibility of managing the risks of buying energy ahead on behalf of our customers, who value the predictability this brings. Taking this decision now, at a time of continuing uncertainty, shows our absolute commitment to pricing competitively, with customers at the forefront of our minds.”
On 13 January, rival firm E.ON cut the cost of its standard gas tariff by 3.5%, equal to £24 a year on for the average dual fuel direct debit customer. Its price cut came into effect immediately and reduced the average annual bill to £1,145.
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