ScottishPower has become the third energy company to announce price cuts, saying it will reduce its standard domestic gas prices by 4.8 per cent, saving households an average of £33 a year.
It also said it will launch a new fixed-price tariff with an average dual fuel bill value of £930, which it reckons is "one of the most competitive in the market place". Both measures come into effect on 20 February.
The price drop is a reflection of oil prices, which have fallen more than 57 per cent in the past six months. Although North Sea oil producers have suffered, the government has urged UK energy providers to pass on lower prices to customers.
The company follows in the footsteps of British Gas, which yesterday said it will cut prices by five percent, while E.On became the first to respond to a letter from energy minister Matthew Hancock last week when it cut its standard gas tariff by 3.5 per cent.
But Neil Clitheroe, ScottishPower's chief executive, also followed his colleagues in the industry by warning that the company "will continue to keep our prices under review".
Our pricing reflects all of the costs that contribute to a customer’s bill. The wholesale price of energy accounts for half of a customer’s gas bill, but non-energy costs such as transmission and distribution networks and environmental and social obligations remain unaffected by any wholesale energy price movements.