From 27th August, British Gas have announced that their consumers’ gas bills will be cut by 5%. This cut has been announced just six months since their last cut was implemented, seeing a £35 pound a year reduction off the average energy bill.
The price drop affects 6.9 million households on a variable or “fix and fall” tariffs; these are tariffs that can change depending on the market.
Customers on a British Gas fixed plan will continue to pay their usual electricity and gas rates. As fixed plans are set rates for certain periods, these will not adjust according to the cuts.
Second price drop since January
In January, the big six supplier reacted to the falling price of wholesale costs by introducing cuts of 5%. Combined with these latest cuts, Centrica (owner of British Gas) claims the price drops equate to a saving of £72 a year off their consumer’s energy bills.
The company have said that today’s announcement of further cuts is a reaction to lower projected gas costs for 2015 – 2016, with the price of electricity remaining the same for consumers.
Acting on CMA findings?
These gas cuts from British Gas come around a week after the Competition and Markets Authority’s (CMA) investigation into the big six, and their prices and profits. The provisional findings revealed that the big six had overcharged consumers, and the market needed to be more competitive.
Big six supplier SSE introduced the cheapest fixed plan on the market just two days following the report’s release, rousing suspicion that it could start a price war. The latest move from British Gas makes this a likely situation for other large suppliers to follow suit and offer attractive plans to keep consumers.
Better deals are still to be had
For “sticky customers” these British Gas gas cuts will be a bonus for their finances, however there are cheaper standard tariffs to be had from other suppliers or British Gas plans. Households should compare their current plan to the rest of the market to see if this extra £35 off a year can be topped by moving onto a different plan.