British Gas to cut prices by 5% but not for another month
Energy giant British Gas is to cut its gas prices by 5% next month following the recent falls in wholesale prices.
The reduction, which doesn't come into effect until 27 February, will benefit 6.8 million customers on standard tariffs and could see people reduce their annual bill by as much as £37 a year.
The moves comes after E.ON cut its standard gas prices by 3.5% with immediate effect earlier this month. British Gas said that it was able to pass on the reduction to its customers despite the fact that most gas being supplied to homes was bought at higher prices in 2013/14.
Iain Conn, chief executive of British Gas's parent company Centrica, said: "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."
Following the announcement, energy expert at MoneySuperMarket, Stephen Murray, said: "A cut in energy prices is always welcome, however, just like we saw with E.ON, this decrease is small in comparison to the whopping 20% drop in the price of wholesale gas over the last 12 months. Furthermore, British Gas customers will have to wait a whole month before they see any reduction in their bills at a time when energy use is at its peak."
He added: "The most important message for consumers is a simple one: don't rest on your laurels waiting for a price cut from your energy supplier – do it yourself for an even bigger saving. An average monthly direct debit customer can benefit from savings of up to £255 by switching to Extra Energy's Fresh Fixed Price Jan 2016 v8.1."