British Gas: More price cuts on the way?

Centrica's results today reveal that British Gas cut household energy bills in response to lowering wholesale energy costs and after ‘energy bought at high prices in 2008 was partially used up'. Even though profits are down 34% to £379 million, the hope is that if the trend in lower wholesale prices continues, Britain's largest supplier may move again to cut prices later on in the year.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "Today's results explain British Gas' cautious approach to cutting prices this year. Although 10% on gas only was lower than expected the supplier was first to respond to lower wholesale prices.

"Despite the lower profits, there is still hope for further cuts on household bills. Wholesale prices are falling and we expect them to drop further because of the recession and falling demand for energy. We would like to see British Gas continue to pass the benefits of these reductions onto consumers as quickly as possible, but in reality any further cuts are likely to come later this year.

"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."

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.