Centrica's British Gas to cut household gas bills 5%

19th Jan 2015 11:11

British Gas, the UK energy supplier owned by Centrica, has promised to cut its residential gas prices by 5% due to the recent fall in wholesale prices.British Gas, which will make the cut effective from 27 February, said it will be keeping its prices "under review for further movements up or down" due to the continuing volatility of wholesale prices.Although most of the gas being supplied to households was bought at previous higher prices, the company said its wholesale costs for 2015 were now reducing to a level where it could pass the reduction on to customers, producing an annual average saving of £37 per household.Wholesale gas costs have fallen 26% between the third quarter of 2013 and the same period in 2014, and have fallen further since."We've been watching the significant moves in the international energy market extremely closely for some time, with the aim of helping customers with a price cut at the earliest possible opportunity," said Centrica chief executive Iain Conn, who took over the role less than a month ago."Operating in such a volatile market, no pricing decision is straightforward."He admitted that the price cutting decision was made "at a time of continuing uncertainty" but was an effort to show the company's commitment to "pricing competitively".British Gas's German-owned rival E.On cut the price of its residental gas by 3.5% last Tuesday.