British Gas cuts electricity, gas prices

| February 9, 2007 | 0 Comments

British Gas cuts electricity, gas prices

British Gas has announced that it will cut the prices it charges for electricity and gas beginning in March. The price reduction comes after six price hikes for electricity and seven increases in the price of gas since 2002, and has some analysts convinced that other energy companies could cut prices as well.

With more than one million customers lost to British Gas in the past year, some analysts have expressed the suspicion that the latest move by the Centrica-owned energy provider is a bid to keep customers from changing providers. In addition, there has been some criticism of the company for not passing on the entire 50 percent drop in wholesale prices to consumers. British Gas is cutting the price they charge for electricity by 11 percent and will reduce the price of gas by 17 percent.

The head of Centrica has defended the amount of his company’s rate cuts by explaining that they buy gas on a long-term basis, not each day in the spot market. He also said that if wholesale prices drop further, some of those savings will be passed on to consumers. That is not likely to appease some customers, according to the Energyhelpline spokesman, who characterized the Centrica decision on prices as a choice to hike its own profits rather than passing on savings.

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