22nd January, 2009 British Gas today announced it will cut gas prices by 10% from 19 February 2009. The reduction will apply to all customers on British Gas' standard tariff, benefiting more than 7.5 million homes.
The price cut, which will save customers £79 on the average annual household gas bill, is the first standard gas tariff cut by a major energy supplier since 2007.
Managing Director, Phil Bentley, said: "We're very pleased to be able to announce this price cut for our gas customers. At British Gas we understand energy bills are a significant cost and we are committed to providing the best possible prices for customers. This price cut will go some way to helping customers manage their budgets, and we will continue to do what we can, when we can."
Over the last 12 months, the wholesale market has experienced unprecedented volatility. In 2008 the wholesale price almost doubled, but British Gas protected its customers from the full impact of this increase by buying wholesale gas in advance.
Mr Bentley explained: "Demand for gas is four times higher in winter than in summer. We buy gas months before it is used so we can make sure we always have enough for our customers, and can protect them from sudden rises in wholesale prices. The recent dispute between Russia and Ukraine demonstrates how important it is that we continue to do so, as it caused a sharp rise in wholesale prices which had fallen from last year's peaks."
On 19 February, British Gas will also introduce a 'prompt payment discount' of up to £15 per year for customers on standard gas tariffs who pay quarterly. For those standard tariff customers paying by direct debit, British Gas will automatically reduce their payments by 10% when the price cuts take effect.
These changes come on top of a recent price reduction for British Gas' pre-payment customers and improved information about the company's online product - making British Gas the first energy supplier to meet Ofgem's key requirements following its recent probe into the UK energy market. Compare Gas Electricity Prices
Source: Centrica
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