Energy prices on way down as British Gas cuts gas prices

British Gas today cut the cost of its standard gas tariffs by an average 7% which could signal a price war and mean energy prices are on the way down.

Whilst the cut in its standard tariff gas prices is a good move and will immediately benefit some eight million households, the cut does not apply to the British Gas online tariffs or to electricity costs.

Managing Director, Phil Bentley, said: “At British Gas, we know household budgets are stretched, and that our customers are concerned about the effect the recent cold weather will have on their winter fuel bills.

He added “This latest price cut means that, no matter where you live in Britain, British Gas is offering on average the cheapest standard gas, electricity and dual fuel prices – beating all other major suppliers.”

The change will save the average gas customer £55 per year.

However, whilst British Gas claim to be the cheapest supplier of standard gas and electricity in Britain, it isn’t necessarily the cheapest overall. There are regional variations in price and online energy plans are invariably cheaper than standard plans. It is therefore important to compare energy prices to select the best plan.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: “Now that British Gas has made the move other suppliers will be under pressure to follow suit. But this is by no means a guarantee of further cuts. More importantly, energy prices increased by 42% or £381 in 2008 and suppliers cut prices by 4% or £54 last year.

If today’s move is an indication of what can be expected from other suppliers, consumers can still expect their household energy bills to be around £270 higher than just a couple of years ago even after price cuts. This means that the overall trend in household energy prices is upwards and consumers must start looking out for themselves.

We can all do this by making sure we pay the lowest possible price for our energy and learning to use less of it. Online energy plans consistently offer the most competitive prices – currently costing around £300 a year less than suppliers’ standard plans. But just 5% or 1.3 million households are on an online energy plan and I would urge many more to join them.”