British Gas Cuts Prices Again

It's good news for 17 million people as British Gas cuts its gas and electricity tariffs once more. How much will you save?

Some good news for gas and electricity customers of British Gas: your bills are being cut for the second time this year.

British Gas is the UK's largest domestic energy supplier, with eleven million gas customers and six million electricity customers. The company (including Scottish Gas in Scotland and Nwy Prydain in Wales) today announced that it is reducing its electricity prices by 6% and its gas prices by 3% with immediate effect.

British Gas's dual-fuel customers (those who buy their gas and electricity from the same firm) will see their yearly bills fall by an average of £40. Naturally, rival energy suppliers are sure to follow British Gas's lead, so keep your eyes peeled for further announcements.

Over the past five years, the UK's major energy suppliers have faced steep increases in wholesale energy costs. Indeed, between the winter of 2002/03 and last winter, the cost of wholesale gas almost quadrupled. Having once been a massive exporter of gas, the UK is now a net importer, but recent supply pressures have been eased by a massive gas pipeline from Norway coming onstream. Thus, wholesale prices have started falling, which led to price cuts for domestic customers in February and March.

Alas, some energy suppliers have steered clear of the price wars. On Monday, energy regulator Ofgem rapped two smaller firms, EDF Energy and Scottish Power, for ripping off their customers by failing to cut their tariffs. The watchdog urged these customers to switch providers -- dual-fuel customers of EDF Energy could save £140 a year, and dumping Scottish Power could mean a yearly saving of £122.

Of course, there are two basic ways that you can cut your household energy bills. The first is to use less energy -- try these energy-saving tips for size. Second, you can track down the cheapest gas and electricity prices and then switch suppliers.

In 2006, more than four million households changed energy suppliers, and 600,000 more did so in the first two months of this year. Other ways to trim your bills include making use of dual-fuel discounts, paying by direct debit, and managing your energy bills online.

Finally, if you'd like to turn up the heat on your energy suppliers, we suggest putting the Fool's Gas and Electricity search engine to the test. It searches over seven thousand different tariffs to find you the best deals, which could save you £100+ a year. In addition, it fully meets the new energywatch Confidence Code, so you can rely on its accuracy and independence.

Good luck with bashing your bills!

More: Timing The Gas And Electricity 'Switch' | The Reason We Have High Gas Bills