British Gas cuts prices

The waiting game is over for consumers as Britain's biggest energy supplier, British Gas, has announced that it is cutting prices. The reductions - 10% or £88 for gas - come into effect on 19th February 2009. It means that the average British Gas dual fuel bill will drop from £1,328 to £1,240.

It is the first supplier to respond to lower wholesale energy costs by cutting prices for customers. The majority of its customers will benefit as the reductions are being made to its standard plans - the supplier says this will benefit over 7.5 million homes.

However, those hoping that last year's price rises would be wiped out will be disappointed. British Gas increased its prices by 46% or £416 during 2008. Its average household energy bill at the beginning of 2008 was £912. After today's cuts it will be £1,240 - £328 or 36% higher than a year ago.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "Now that Britain's biggest supplier has made the move, other suppliers will be under pressure to follow suit. We are sure to see a flurry of pricing announcements.

"What today's move tells us is that suppliers are feeling very cautious and energy price cuts are likely to be too little and too late to help consumers with this winter's fuel bills. More importantly, it is now looking highly unlikely that price cuts are going to wipe out last year's painful 42% or £381 hike in household energy bills. There will be a small dip this year, but overall the trend in household energy prices is up.

"Rather than holding out for price cuts, consumers should help themselves now by making sure they are paying the lowest possible price for their energy and learning to use less of it. Moving to dual fuel, paying by direct debit and signing up to an online plan will all help save money - in fact switching to a competitive plan could cut your energy bill by up to £350."

For more information visit uSwitch.com