Energy giant British Gas has confirmed it’s slashing its gas and electricity prices from next month.
The company says it will cut standard tariffs for gas by 17 per cent and electricity by 11 per cent from 12 March.
The price cuts are the first reduction by a major power supplier following a series of price hikes.
A new social tariff will also be introduced for ‘very vulnerable’ users such as those on income support and pension credit.
Sam Laidlaw, Chief Executive of Centrica, which owns British Gas, 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.’
British Gas has increased gas prices on seven occasions since 2002, with electricity tariffs rising six times. It last cut prices in spring 2000.
Centrica said it was able to act today because average wholesale gas prices this year were almost half the level seen during 2006.
The company said British Gas was now the cheapest gas supplier for the majority of UK energy customers.
Energy regulator Ofgem said British Gas had fired the first shot in what it expected to be the start of another battle for customers.
Chief executive Alistair Buchanan said: ‘The heat is now on British Gas’s rivals who will have to consider how to respond to this price cut.
‘On one of the coldest days in the year we particularly welcome British Gas’s laudable moves to help low income and other vulnerable customers.
‘Today’s announcement means that domestic customers will start to enjoy the benefits of lower prices after a difficult period of high prices.’
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