British Gas to slash prices in February

Millions of homes across the UK look set to benefit from the news that British Gas will be cutting its rates by 10% next month.

The price drop means that the average household will make an annual saving on energy bills of just over £80 when the reduction is introduced on February 19.

The news marks the first price fall by a leading energy provider since 2007, and follows criticism from the industry regulator, Ofgem, which had demanded that energy companies reduce their charges due to the declining costs of wholesale gas and oil.

The 7.5 million households currently on British Gas' standard tariff will be affected by the changes, with customers who pay their gas bills within 15 days able to make another saving of £15 on their quarterly bills.

British Gas' managing director, Phil Bentley, explained that because the company purchases its gas well in advance, it has been able to help cushion customers from sudden and significant variations in the wholesale price of gas, which he said nearly doubled last year.

The company also confirmed that, by next year, it expected to invest approximately £1 billion in a home insulation programme which would see the supplier subsidising the installation of energy saving devices in its customers' homes in order to help reduce carbon emissions and household bills.

According to the Energy Saving Trust, the programme could help the average home make an annual saving of £365.

Source: Times Online | Last updated: 22nd January 2009

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