With its first round of price cuts due to come into effect on Monday 30th April, Powergen has promised single electricity, single gas and dual fuel customers it will undercut British Gas’ standard quarterly billed tariff until September 1st 2008.

But Powergen has strategically chosen to pitch its own pricing against a higher priced British Gas range, SimplySwitch.com’s Karen Darby claimed.

“The Powergen guarantee products compare against one of British Gas’ more expensive tariffs,” she remarked, adding: “There are many more competitively priced products available.”

The second phase of cuts unveiled by British Gas earlier this week will slash customers’ bills by £40 a year on average, the supplier said.

A two-tier price war appears to be opening up among UK energy suppliers, with two lead players who have already cut customers’ bills now announcing further cuts.

But the state of play could change at any time, with Scottish Power, recently singled out for criticism by Ofgem for failing to cut customers’ bills, hinting price cuts could be in the pipeline as of next week.

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