Britain’s biggest household energy supplier British Gas became one of the first utilities to cut gas prices for residential customers yesterday with owner Centrica announcing a seven per cent cut.
The price cut, which partly reflects lower gas wholesale prices, will affect eight million households and save the average gas customer £55 per year, British Gas said.
“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,” British Gas managing director Phil Bentley said.
Britain’s wholesale gas prices have been under heavy pressure from a global surplus for about a year, though a record-breaking cold spell this winter helped recover part of its losses.
Day ahead gas prices stood at around 35p per therm yesterday after languishing below 30p for months until late in December. They stood well above 60p one year ago.
Low gas prices have also led power generators to generate as much electricity as possible from gas instead of coal.
British Gas last year cut gas and electricity prices by 10 per cent each.
Typically, when one supplier cuts prices, the others tend to follow.
The big six energy suppliers in Britain are Centrica, RWE’s npower, E.ON, EDF Energy, Scottish & Southern and Iberdrola’s Scottish Power.
City A.M. Reporter