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| Version 2 | Version 3 |
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| British Gas to cut gas prices by 5% | British Gas to cut gas prices by 5% |
| (about 5 hours later) | |
| British Gas has announced it will cut gas prices by 5% from the end of August but its customers will still be paying £70 a year too much for their energy, according to one expert. | British Gas has announced it will cut gas prices by 5% from the end of August but its customers will still be paying £70 a year too much for their energy, according to one expert. |
| Britain’s biggest energy provider said that the price cut, which will take effect from 27 August, would reduce annual energy bills on average by £35 and benefit 6.9 million of its customers on Standard and Fix & Fall tariffs. | Britain’s biggest energy provider said that the price cut, which will take effect from 27 August, would reduce annual energy bills on average by £35 and benefit 6.9 million of its customers on Standard and Fix & Fall tariffs. |
| Commenting on the cut, Mark Hodges, British Gas managing director, said: “There are a range of costs that make up energy bills, some decreasing and others increasing. | Commenting on the cut, Mark Hodges, British Gas managing director, said: “There are a range of costs that make up energy bills, some decreasing and others increasing. |
| “This reduction reflects our lower projected total costs for 2015 and 2016 and we’re pleased that customers will see the benefits in their gas bills ahead of next winter. ” | “This reduction reflects our lower projected total costs for 2015 and 2016 and we’re pleased that customers will see the benefits in their gas bills ahead of next winter. ” |
| It follows a similar cut of around £35 earlier in the year by British Gas and other providers. | It follows a similar cut of around £35 earlier in the year by British Gas and other providers. |
| Joe Malinowski of price comparison website theenergyshop.com said that the cut was “long overdue”, but that British Gas should have reduced prices by a further £70. | Joe Malinowski of price comparison website theenergyshop.com said that the cut was “long overdue”, but that British Gas should have reduced prices by a further £70. |
| “Wholesale energy prices at the start of the year indicated that retail prices should be around £140 lower - but the first round of cuts in January were more like £30,” he said. | “Wholesale energy prices at the start of the year indicated that retail prices should be around £140 lower - but the first round of cuts in January were more like £30,” he said. |
| “Energy providers then held off further cuts because they were waiting for the outcome of the general election [where a Labour government would have imposed a price freeze] so today’s cut is expected but still small.” | “Energy providers then held off further cuts because they were waiting for the outcome of the general election [where a Labour government would have imposed a price freeze] so today’s cut is expected but still small.” |
| Even after August’s cut British Gas customers on its standard tariff could save almost £200 a year by switching to another of the energy giant’s tariffs that is being sold by Sainsbury’s. | Even after August’s cut British Gas customers on its standard tariff could save almost £200 a year by switching to another of the energy giant’s tariffs that is being sold by Sainsbury’s. |
| British Gas’s standard prices will drop to a typical £1,121 when the cut takes effect in August. But Sainburys, which has one of the cheapest fixed tariffs on the market, is charging a typical £930 a year. The Sainsbury’s tariff is supplied by British Gas. | British Gas’s standard prices will drop to a typical £1,121 when the cut takes effect in August. But Sainburys, which has one of the cheapest fixed tariffs on the market, is charging a typical £930 a year. The Sainsbury’s tariff is supplied by British Gas. |
| “It is anomalies like that that mean this whole energy market makes no sense,” said Malinowski. | “It is anomalies like that that mean this whole energy market makes no sense,” said Malinowski. |
| Related: Millions of Britons are overpaying for energy, says competition report | Related: Millions of Britons are overpaying for energy, says competition report |
| The British Gas announcement comes just days after an energy market investigation concluded that householders are paying £1.2bn a year too much for gas and electricity. | The British Gas announcement comes just days after an energy market investigation concluded that householders are paying £1.2bn a year too much for gas and electricity. |
| A long-awaited report from the Competition and Markets Authority (CMA) into the energy market found that average prices offered by the big six firms over the period 2009 to 2013 were around 5% higher than they should have been. | A long-awaited report from the Competition and Markets Authority (CMA) into the energy market found that average prices offered by the big six firms over the period 2009 to 2013 were around 5% higher than they should have been. |
| It concluded that customers bore more responsibility for the overspend than companies because they do not switch supplier enough. Nevertheless it recommended a price cap on high-cost tariffs, which could come in as early as January 2016. | It concluded that customers bore more responsibility for the overspend than companies because they do not switch supplier enough. Nevertheless it recommended a price cap on high-cost tariffs, which could come in as early as January 2016. |
| Customers on British Gas’s other two fixed-price tariffs, where prices are immune to rises or cuts until autumn 2016, and those on older tariffs no longer available to new customers will not benefit from the cuts. The company has 41 tariffs altogether, including four that are available to new customers. | Customers on British Gas’s other two fixed-price tariffs, where prices are immune to rises or cuts until autumn 2016, and those on older tariffs no longer available to new customers will not benefit from the cuts. The company has 41 tariffs altogether, including four that are available to new customers. |
| Not all British Gas customers on the tariffs that qualify for the price reduction will see their bills fall by 5%. The cut will vary by regions, depending on the cost to distribute energy to each place, said the firm. Electricity prices remain unchanged. | Not all British Gas customers on the tariffs that qualify for the price reduction will see their bills fall by 5%. The cut will vary by regions, depending on the cost to distribute energy to each place, said the firm. Electricity prices remain unchanged. |
| The other major energy suppliers that make up the “big six” are expected to announce similar price cuts over the summer. |