Energy firm E.ON will cut its standard gas tariff by 6% from the end of the month.

E.ON said its average annual bill would be £42 lower for those paying by direct debit.

The reduction will affect 1.9 million of E.ON's 5.5 million customers. Those on fixed or contract deals will not benefit.

Graham Bartlett, managing director of E.ON's retail business, said: “We've been very aware of the effect of both the recession and the exceptionally cold winter on our customers, especially those most in need, so we are pleased to see the opportunity to now reduce prices.

“The fall in current wholesale prices is only part of the pricing story as our customers are using gas bought over a number of years at much higher prices than today.”

The firm has also altered its WarmAssist product from 1 March, aimed at the most vulnerable, where alongside the standard gas cut, electricity prices were reduced 5%.

Today's reduction follows last month's 7% cut in British Gas's average standard gas tariff and a 4% reduction from Scottish & Southern Energy.

Robert Hammond, energy expert at Consumer Focus, said the E.ON cut would be welcomed by its customers, but accused the sector of acting with a “pack mentality” and condemned a lack of competition in the market.

“It speaks volumes that this announcement is remarkably similar to ones made recently by E.ON's competitors,” he said.