British Gas price declines go into effect

Previously announced declines in energy bills for British Gas customers go into effect Monday, sending the average annual fuel bill for gas and electricity combined down to £953, a drop of £167. The price of natural gas is going down by 17 percent, while electricity prices are dropping by 11 percent.

This is the first price decline by British Gas, owned by Centrica (LSE: CNA) since 2000. With wholesale gas prices down by around 50 percent over the past six months, UK utilities have come in for criticism for high prices and over four million people have switched electricity or gas suppliers in the past year, according to energy regulator Ofgem. Most of them were looking to lower their power bills. British Gas has lost around one million customers in the past year, and some analysts have said that the new price cuts could help it retain customers.

Since announcing price cuts in February, four other UK energy suppliers have also said that they will lower prices. The chief executive officer of Simplyswitch, an energy switching website, has said that the price declines are “a step in the right direction” but that energy companies still need to drop prices more in order to match wholesale price declines.

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