UK energy industry regulator Ofgem has praised British Gas for its decision to cut residential energy prices while stating it expects a further 20% reduction, the Mail on Sunday has reported.
In recent days Centrica owned British Gas revealed plans to cut its residential gas and electricity prices by 17% and 11% respectively from early March. The move follows a lengthy period of wholesale price reductions on the UK market, which has been precipitated by lower demand and improved infrastructure.
Ofgem has warmly welcomed the move, while predicting that competition will result in further reductions in the coming year. Scottish & Southern has already said it will cut prices and, according to the Mail on Sunday, has now predicted that British Gas’ cuts will be eclipsed.
Meanwhile, npower and Powergen are also expected to announce cuts next month in response to British Gas and SSE’s moves. And while British Gas has announced that it will be the cheapest supplier when its tariff reductions come in, it is expected that its rivals will undercut it, making such claims short lived.