British Gas cuts domestic prices by 7%

British Gas today cut average gas bills by 7% in a move set to benefit around eight million households.

The reduction, which is effective immediately, comes amid falls in wholesale prices from their highs of two years ago.

British Gas said customers will save an average £55 a year as a result of the move, which is the third cut in energy prices from the company in the past 12 months.

The gas price cut comes after a period of freezing winter weather which raised the spectre of a huge hike in energy bills.

Managing director Phil Bentley said: "At British Gas, we know household budgets are stretched, and that our customers are concerned about the effect the recent cold weather will have on their winter fuel bills.

"I'm pleased we're able to offer our customers some extra help with this gas price cut - and that we're able to do this while it's still winter, allowing our customers to really feel the benefit."

The cut is an average across all regions and all paying methods, although those using pre-payment meters will have a slightly larger reduction as the firm removes the price difference between pay methods.