It is the first gas tariff cut by any supplier since 2007, with British Gas claiming the price cuts will save the average household £84 on its annual gas bill.
Phil Bentley, managing director of British Gas, said the price cuts are aimed at "helping customers manage their budgets".
He added: "At British Gas we understand energy bills are a significant cost and we are committed to providing the best possible prices for customers."
The firm always buys its gas months in advance to protect consumers from sudden rises in wholesale prices, he stated.
During December, British Gas reduced its rates for dual fuel prepayment customers by an average of £22 a year.
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