The reduction comes into effect immediately and is expected to save 4.5 million customers and average of £43 a year.
British Gas slashed the cost of its retail gas by ten per cent in February of this year a move that affected more than seven million households around the UK.
Customers buying combined electricity and gas from the firm can expect to save on average £132 per year.
However, the company raised its electricity prices by 26 per cent last year.
Phil Bentley, British Gas managing director, told the BBC: "The price of electricity on the wholesale markets has been falling and we've always said British Gas will do what we can to lower prices when we can."
British Gas recently rolled out an energy-saving pilot scheme in Hampshire called the Green Homes Assessment service.
Click here to run an energy price comparison, and see if you could be paying less for your gas and electricity.