British Gas brings in instant price cuts

26 April 2007
British Gas has followed up the first round of price cuts introduced in February with a shock second phase.

Electricity prices will fall by six per cent and gas bills by three per cent with immediate effect.

Dual fuel customers who buy both utilities from the provider will see a £40 fall in their gas bills, analysts predict.

The UK's largest single energy provider has skilfully undercut the competitors who flocked to cut their bills after it introduced the first set of cuts in February – though it is not clear how long that advantage will hold.

In the aftermath of its unilateral price cuts pronouncement, rivals npower, Powergen and Scottish & Southern Energy followed suit.

British Gas seems to have chosen its moment carefully, maximising its customer credit at a moment when competitors EDF Energy and Scottish Power are struggling to regain confidence.

Earlier this week, watchdog Ofgem condemned them for failing to bring in cuts.

Over the past 12 months, British Gas has lost about one million customers.

But the switching frenzy of the last few months, with 600,000 customers changing supplier in January and February, suggests consumers are watching closely where the cuts are.

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