British Gas has attributed the price cuts to investments in new undersea pipelines, which have led to increased gas supplies reaching the UK. British Gas said that the increased imports had reduced wholesale prices, which the company has now been able to pass on to its customers.
According to the BBC, British Gas had increased gas prices seven times and electricity prices six times since 2002, which resulted in about one million customers leaving British Gas during the last 12 months. The company is hoping that, through this initiative, it may regain some of this custom.
British Gas is not, however, the only company to be introducing price cuts. Since British Gas announced the cuts in February 2007, rivals npower, Powergen and Scottish and Southern Energy have all revealed plans to undercut the company’s prices and online tariffs.
Although the cuts have met with industry approval, British Gas has been accused of not doing enough to reassure its customers. Karen Darby, CEO of energy switching website Simplyswitch, commented: This is a step in the right direction and will help the many families who struggle to pay their energy bills. However, as its energy prices have rocketed in recent years, the company still has some way to go to redress the balance.
Paul Green, chief executive at Energyhelpline.com, was also skeptical. Cited in inthenews.com, Mr Green said: Normally we would say that price falls are good news for consumers. However, most customers are being lulled into a false sense of security by the headlines that prices are coming down.
