Price war in pipeline as gas bills cut by £55 a year

HOPES for an energy price war were raised today after Scottish Gas laid down the gauntlet with a 7 per cent cut in average gas bills.

Consumer groups welcomed the reduction and urged householders to start shopping around for cheap deals – but criticised the firm for waiting until after the bitterly cold winter weather to pass on falls in wholesale prices.

British Gas, which trades as Scottish Gas in Scotland, said the cut affected eight million households and that customers would save an average 55 a year as a result of the move.

The average annual dual fuel bill is now 1,123, compared with 1,310 in January 2009 – after hefty price hikes the year before.

Audrey Gallacher, of Consumer Focus said, the gas price reduction was a "rare piece of good news" as fears mount of an era of high prices.

"We welcome British Gas taking the lead and look to other energy companies to quickly follow," she said.

"People should use the British Gas cut as a trigger to check they're getting the best possible deal – thinking about switching, making sure they're on the right tariff and getting the right advice on energy efficiency.

"But consumers could have seen prices fall earlier, as energy companies should have passed on wholesale price cuts before winter."