British Gas announces energy price cuts

British Gas today became the first major energy supplier in the UK to announce a reduction in its tariffs for residential gas and electricity customers. From 12 March 2007 British Gas will cut its standard tariffs for gas by 17 per cent and for electricity by 11 per cent. As a result, the average annual dual fuel bill for its customers will fall by £167 to £9531.

For the overwhelming majority of UK energy customers, British Gas will be the cheapest gas supplier. Its Click Energy 2 online tariff will be the cheapest dual fuel energy price available in the market.2

British Gas is also launching the UK’s largest social tariff, the Essentials Tariff, at a cost of £40 million per annum. Essentials will lower gas and electricity bills further still for up to 750,000 customers defined by the Government as vulnerable. Prepayment meter customers who qualify for Essentials will see their energy bills drop by 24.6% or £285 per annum.3

Phil Bentley, Managing Director designate, British Gas said: “Not only are we now the cheapest energy supplier both for gas and for dual fuel across Britain, we are also the greenest4. We are taking the lead in passing on the benefits of falling wholesale gas prices. As a result of this move our customers will be better off and for many vulnerable households that struggle to balance their bills, our social tariff will remove the burden of not being able to access our cheapest prices, typically direct debit, irrespective of their method of payment.”

Sam Laidlaw, Chief Executive, Centrica said: “The billions of pounds we have committed to gas contracts underpinned the construction of new undersea pipelines that are now delivering additional gas supplies to the UK. These new supplies of gas have directly led to the fall in wholesale prices which we can now pass on to our customers. Our price cut still enables British Gas to make a sustainable margin in 2007 and allows for further investments in the future.”

As a further measure for customers seeking reassurance over volatile energy prices in the future, British Gas is also launching a new product called Price Guarantee 2008. At no extra premium and with no early exit penalty, customers who take this product will be guaranteed our new cheaper prices until 31 May 2008.

Dual Fuel prices as 12/3/07 Direct Debit Cash /cheque Pre Payment
British Gas £874.44 £953.02 £1034.80
Average competitor £930.47 £991.18 £1051.98
npower £965.75 £1028.75 £1122.35

Bills are based on industry average annual consumption of 20,500 kWh for gas and 3,300 kWh for single-rate metered electricity