British Gas ignites price war

09 February 2007
British Gas has announced price cuts which take it from being the most expensive home energy supplier on the market to the cheapest.

The long-anticipated cuts, which will cut gas bills by 17 per cent and electricity by 11 per cent, giving savings of £120 and £47 per year respectively, will come into force on March 12th.

But the supplier would have had to cut gas bills by 22.1 per cent in order to pass on the full impact of the drop in wholesale gas prices, which have fallen by almost two-thirds since June 2006, uSwitch.com commented.

Nevertheless, every one per cent decrease in gas prices will "pull just over 12,000 customers out of the fuel poverty pit", uSwitch's head of consumer policy, Ann Robinson, noted.

Market analysts predicted the announcement would trigger a flurry of price reductions from other providers.

A spokeswoman at Scottish and Southern Energy (SSE), previously the cheapest supplier, fired a retaliatory shot, telling the Guardian SSE would introduce price cuts calculated to "blow them out of the water".

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