British Gas hits back with further cut as SSE joins price war

British Gas hits back with further cut as SSE joins price war

Scottish and Southern Energy has joined the price war in Britain's residential energy market, announcing a cut in gas prices from today and electricity prices from the beginning of next month.

The company, which has 7.5 million customers, said gas bills would be cut by 12% and electricity prices by 5%, reducing average annual dual fuel bills by 9% to £873. "This means SSE will continue to be the UK's cheapest supplier of energy, even after all the recently announced price cuts take effect," the company said.

British Gas - which set off the current round of cuts when it said three weeks ago that it would reduce its prices for gas and electricity by 17% and 11% from March 12 - hit back by announcing a further 4% cut for online-billed dual fuel users. It said this would make its online tariff the lowest on the market.

Advertisement starts

---

---

Advertisement ends

Npower was the first to follow the initial British Gas move, followed by Powergen this week and now SSE. ScottishPower and EDF Energy are the only two of the big six still to announce cuts. Yesterday ScottishPower said it was "monitoring" the situation while EDF said its prices were "continually under review".

SSE said it had decided to cut gas prices immediately because "for most people that is the fuel they use most and is most expensive. We wanted to introduce the reduction at a time when it would be a real benefit."

Mark Todd, director at energyhelpline.com, said SSE's cuts made other companies look "miserly". SSE "was the last to put up its prices last year, and, while it's not the first to announce a price fall, it ... has implemented it faster than the likes of Powergen and British Gas."

Geoff Slaughter, energy product manager at uSwitch.com, said: "Scottish and Southern Energy has played the role of the good guy in the energy market for some time now. It has a consumer-friendly reputation to live up to, which is why everybody sat up and took note when it said its price cuts would blow us away.

"But it has only partly delivered - while its new standard tariffs have rocked British Gas, npower and Powergen back down the cheapest supplier table, it is simply playing follow-my-leader with its online tariffs, undercutting npower by only 48p."

Confirmation also came yesterday that water bills in England and Wales will rise from the beginning of April. The industry regulator, Ofwat, said household bills would increase by an average of 7% - a 3.1% real rise and 3.9% for inflation. The overall figure masks regional differences, with Severn Trent increasing its charges by 5.7%, or about £15 per household, while South West Water customers face a 10.1% rise - an average of £44.

Guardian Unlimited © Guardian News and Media Limited 2006