Business

British Gas to cut gas prices by 5%

British Gas van Image copyright Getty Images
Image caption British Gas follows E.On in announcing a price change, but it is not immediate

British Gas - the UK's biggest domestic energy supplier - is to cut gas prices by 5% on 27 February.

The supplier, part of the Centrica group, said the cut would reduce the typical household's annual energy bill by £37.

The move comes after E.On reduced its standard gas prices by 3.5% last week.

British Gas said that the price cut reflected the recent fall in wholesale gas prices, which suppliers have been under pressure to pass on.

"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," said Iain Conn, chief executive of Centrica.

"Operating in such a volatile market, no pricing decision is straightforward."

Major energy suppliers' price changes
Supplier Change Date of change
E.On Gas: down 3.5% 13 January
British Gas Gas: down 5% 27 February

'Earliest opportunity'

Various commentators and politicians have said that energy firms should be reducing prices. The wholesale price, which usually moves in tandem with oil prices, has seen double-digit falls over recent months.

By some measures, wholesale gas prices are down by as much as 29%.

British Gas said that it was keeping prices under review subject to any further moves in the wholesale price.

Unlike E.On, which announced a price cut with immediate effect, British Gas said its change would not take effect for more than a month, following the coldest time of the year.


Julie Harding, a British Gas customer from Manchester, writes:

I have been with British Gas for years, but it is really disappointing to see that they are waiting for winter to end before lowering their prices.

If E.On can do it with immediate effect, why can't British Gas?

I lost my job a few months ago, and it is a real struggle trying to pay for everything, as well as heat the house, on £72.40 per week.

It has been snowing the last couple of days. I bet the bosses at any of the energy suppliers can afford to put the heating on for more than 30 minutes twice a day. I can't.


British Gas said that the move would benefit 6.8 million customers, most of whom were on its standard tariff, and that "we have done as much as we could as quickly as we could".

Media playback is unsupported on your device
Media captionChristine McGourty from British Gas: "We've done as much as we could, as quickly as we could"

The cut "accurately reflects" the change it saw in its costs, given that a large amount of energy was bought by suppliers in advance, it added.

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."

He suggested the price cut would not have been happened if suppliers were subject to Labour's proposed 20-month price freeze - a claim which Labour disputed.

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."

Stephen Murray, of price comparison website Moneysupermarket, said: "The ball is firmly in the court of the remainder of the big six who are yet to make the next move and honour the energy savings that really should have been passed on to customers months ago."

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