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British Gas cuts family fuel bill by average £79
Jonathan Prynn, Consumer Affairs Editor22 Jan 2009
BRITISH GAS has slashed 10 per cent off gas bills, the first cut in energy prices since 2007.
The move, almost certain to be followed by other major suppliers, will save the average household about £79 a year.
It will benefit about 7.5million homes nationally and about one million in London.
But it was immediately condemned as "disappointing" by energy experts who said British Gas could afford to cut by more.
Since the summer, the gas wholesale price has dropped almost 50 per cent to levels not seen since late 2007. Energy companies had been severely criticised by consumer groups, regulators and increasingly, the Government, for failing to cut domestic bills despite collapsing oil and gas prices on the world markets.
Energy and Climate Change Secretary Ed Miliband warned energy companies this month not to use the dispute between Russia and Ukraine over gas supplies as an excuse not to lower prices.
The "big six" suppliers - British Gas, EDF, E.on, npower, Scottish and Southern Energy and ScottishPower - had even been threatened with a windfall tax if they did not do more to help their poorest customers. Joe Malinowski, of comparison website The Energy Shop, said: "This looks disappointing if you look at where wholesale gas prices are now.
"It is currently the biggest ever gap between wholesale prices and retail prices."
British Gas managing director Phil Bentley said: "Why are we not doing more? It's because we buy our gas months in advance of the winter so we have got certainty. "
He said wholesale prices were still 70 per cent higher than two years ago but domestic tariffs were only 11 per cent more expensive.
There will also be a discount of up to £15 per year for customers on standard gas tariffs who pay quarterly.
Reader views (15)
this is all pr. the prices have still increased by 20% work it out, with the 33% increase 10% off is nothing. oil is only $43 a barrel so why is electricity still high, maybe they have some bad debt to hide and are trying to shore things up? or some fat cats to feed. and in regards to the estimates and bills. they time the meter reading to make best use of price increases and decreases. and the companies were helping when they phoned up to see if you wanted to fix your price (no) the companies knew the prices would fall and you would be locked into a rubbish deal. and one last thing don't believe the companies are any better than banks as they all have sales targets and the poor person phoning has to hit them or they are joining a very long dole queue and they don't all dance to hot chocolate
- Jd, london, 22/01/2009 22:35
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what's the point to increase 35% gas price in september-2008 and after winter to decrease only 10%gas price.Ofcourse in summer,customer use less as compare winter.Means customer has to still pay 25%gas more compare before september-08.
- Paul Smith, london, 22/01/2009 21:22
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Now if British gas can only do something about their crazy ESTIMATES of gas usage which demand huge, incorrect amounts of money from their hard-pressed customers, then we might start to benefit from this price decrease eventually
- Keith Price, Luton, England, 22/01/2009 16:30
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Suggest British Gas customers force the issue here by asking for a thorough breakdown of costs incurred--then pay off any deficit (if paying by direct debit)--then-having got alternative quotes- threaten to move supplier if their tariff is not specifically reduced by the 10% signalled.
- William Grierson, Kimpton-UK, 22/01/2009 16:25
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When the price goes up they do that from the next day when it goes down we have to wait a few weeks surprise surprise.
- Mike Melbourne, Bedford England, 22/01/2009 14:21
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My provider has told us that prices will fall this month. However, we then received a letter to say our next Quarterly Bill is being extended until March instead of January, so again, we won't see any benefit of the price reduction until the Summer bill. Clever, eh?
- Sue, Orpington, Kent, 22/01/2009 13:24
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Hang on. Summer 2008 British Gas raised it's gas prices by a massvie 35% !! Now we are being offered a 10% reduction? As always another privatised industry looking out for profit margins and it's shareholders
- Roberto Carballeiro, Basingstoke, 22/01/2009 13:12
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As always they are quick to react to put the prices up but take ages to slash the prices down. In the meantime we are paying for it. Typical.........
- Noneau, London, 22/01/2009 12:51
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It's not exactly news that British Gas always raises it's prices when winter approaches, and lowers them when it gets warmer.
- Paulina Smid, London, UK, 22/01/2009 11:50
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I do not want these companies to be subjected to a windfall tax as that is simply a stealth tax from my pockets as I would still be paying over the odds for my energy. What I want is for the appropriate Agency / Government department to force the companies to be genuinely competitive. If the companies were subjected to the same anti-trust scrutiny and action that is practised in the USA, then prices would already be Fair. I believe the energy companies are implicitly colluding with each other and not being truly competitive. If they were being competitive then prices would already be far lower than what they are.
- Ross, London, UK, 22/01/2009 11:46
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A Nu Labour Style smoke and mirrors con job - down 10% in time for the spring and summer bills, no doubt seeing increases above 10% come August and in time for Autumn.
- M, London, 22/01/2009 11:24
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This is an insult. They raised their prices by 35% last year.
- Isabel, Woking, 22/01/2009 11:20
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When is this 10% slash being implemented? I recieved my Gas bill yesterday and it does not show a discount. Call me a synic but could it be that this reduction comes into force afer the winter bills have been paid when everyone has a lower bill anyway.
- Howard, London, UK, 22/01/2009 11:13
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Just 10%? And in time for the Spring billing quarter...how convenient was that.
Expect price rises to be announced in August.
- Escobar A-Lop-Lop, Camden County, 22/01/2009 10:39
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Is this good or is it a con? Last year British Gas raised its prices by ten per cent more than any other supplier and we are now in a market of falling gas prices. I think that 20% would have been good, anything less is a PR stunt.
- Casper Slides, France at the moment, 22/01/2009 10:06
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