British Gas is cutting household gas prices by 5 percent (worth an average of £37 a year).
British Gas is the trading name of British Gas Services Limited and British Gas New Heating Limited, both subsidiaries of Centrica.
Centrica said that the reduction in standard tariffs will start on February 28 and benefit 6.8 million customers.
The announcement comes following E.ON’s 4 per cent reduction last week.
Iain Conn, chief executive of 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.”
Prime Minister David Cameron said:
“It’s welcome to see British Gas cutting prices. We’ll continue to encourage energy firms to pass on falls in wholesale prices to customers.”
Cameron said that the price cut wouldn’t have happened if suppliers were subject to the Labour party’s proposed 20-month price freeze.
Labour leader Ed Miliband said:
“The right way forward on this is Labour’s energy price freeze – which will mean that prices can only fall and cannot rise – and giving the regulator the power to cut prices when those changes don’t get passed on.”
Michael Uzielli, finance director at British Gas, said:
“Our pricing decisions are taken on the basis of our costs and how they move up and down,” adding that “it’s not a political decision.”
Ann Robinson, director of consumer policy at uSwitch, said:
“Lower prices are good news for consumers but we believe that prices can and should be cut even further. As two of the big six suppliers have now lowered their standard prices, the pressure is well and truly on EDF Energy, Npower, ScottishPower and SSE to follow suit.”