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British Gas to cut gas prices by 5% British Gas to cut gas prices by 5%
(35 minutes later)
British Gas says it will cut household gas prices by 5%, cutting annual energy bills by an average of £35.British Gas says it will cut household gas prices by 5%, cutting annual energy bills by an average of £35.
It is the second gas price reduction in six months by the firm, and it says the two price cuts together will lead to an average total saving of £72. It is the second gas price reduction in six months by the firm, which says the two price cuts together will lead to an average total saving of £72.
The latest price cut will take effect from 27 August.The latest price cut will take effect from 27 August.
Wholesale gas prices have fallen by 25% since December 2014. British Gas said the cut reflected lower projected costs for 2015 and 2016. The news was criticised as "underwhelming" by the website MoneySuperMarket, which said the cut should be introduced immediately.
British Gas announced a price cut of 5% in January following moves by a number of the other "Big Six" energy suppliers.
The price cut will affect 6.9 million energy customers either on standard or "fix and fall" tariffs.The price cut will affect 6.9 million energy customers either on standard or "fix and fall" tariffs.
Electricity prices will remain unchanged. It follows a similar cut of 5% that British Gas made in January, after moves by a number of the other "Big Six" energy suppliers.
The cost of wholesale gas has fallen from 42.9p a therm last December, to 57.9p this week - following falls in the price of oil. Costs
Consumer groups have criticised energy firms in the past for failing to cut prices in line with wholesale costs. The website MoneySuperMarket said the cut should be deeper, following a 25% fall in the wholesale cost of gas since December 2014.
The price has fallen from 57.9p a therm last December, to 42.93p this week - following a drop in the price of oil.
Stephen Murray, energy expert at MoneySuperMarket, said the cut was "long overdue, and may seem underwhelming compared to how low wholesale prices are".
But energy firms say there are many other costs involved.But energy firms say there are many other costs involved.
"There are a range of costs that make up energy bills, some decreasing and others increasing," said Mark Hodges, the managing director of British Gas."There are a range of costs that make up energy bills, some decreasing and others increasing," said Mark Hodges, the managing director of British Gas.
They also buy gas contracts up to two years in advance, to guarantee sufficient supplies.
Will you see your gas bill go down? How do you feel about today's announcement? Please email haveyoursay@bbc.co.uk with your experiences.Will you see your gas bill go down? How do you feel about today's announcement? Please email haveyoursay@bbc.co.uk with your experiences.
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