Energy giants, British Gas, have just announced an upcoming price cut of their standard tariff, due to take place at the end of February. This price cut comes just days after competitor E.On dropped their gas prices by 3.5%.
British Gas – the UK’s biggest supplier of domestic energy – is to slash standard gas tariff prices by 5% on February 27th, resulting in a £37/year average savings for customers. The energy company says that this price reduction is a reflection of the recent 20% drop in the wholesale price of gas. There was a huge amount of pressure on suppliers to echo the reduction in wholesale prices in the rates they charge customers.
E.On was the first of the Big Six suppliers to do so, announcing a 3.5% reduction in the price of their standard gas prices, which resulted in an average saving of £24 per year for consumers. British Gas has now followed suit with an even bigger reduction of 5%, however customers will have to wait over a month, until February 27th, to benefit from the reduction. This has been held in direct contrast to E.On’s price cut, which took immediate effect.
British Gas report that 6.8 million customers who are on standard gas tariffs will benefit from the price drop. However, consumers could stand to save much more by switching their energy away from standard tariffs entirely.
Head of Consumer Energy at UK Power, Scott Byrom, says “Although the £37/year drop in gas price is great and is certainly an improvement, domestic energy customers could save much more – up to £300/year in fact – by comparing the entire market, and switching to the best deal. This is particularly true if, like most customers, you’re on a supplier’s standard tariff, as they are often the most expensive.”
With two of the Big Six beginning to pass savings from wholesale costs onto customers, it puts even more pressure on the remaining suppliers to do the same. It is thought that the remaining Big Six companies will announce their own price cuts on gas tariffs, which means that over 90% of the energy market could benefit from a discount.
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