British Gas Slashes Energy Prices

British Gas is cutting its gas prices by 10% from February 19, the energy provider has announced.

Centrica

British Gas raised its gas prices by a record 35% in the summer

The reduction will apply to all customers on British Gas' standard tariff, benefiting more than 7.5m homes.

The price cut is the first standard gas tariff reduction by a major energy supplier since 2007, and will save the average household £79 per year.

The proceeds of the rights issue will be directed toward this opportunity, with the balance of the consideration being funded with additional debt and, possibly, asset sales.

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In July 2008, British Gas raised its gas prices by a record 35%, while other firms lifted prices by more than 20%.

British Gas managing director Phil Bentley said: "We understand energy bills are a significant cost and we are committed to providing the best possible prices for customers.

"This price cut will go some way to helping customers manage their budgets, and we will continue to do what we can, when we can."

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Energy providers have been under pressure to reduce gas and electricity bills following the collapse in the world oil prices, which the cost of wholesale gas is directly linked to.

Crude oil peaked at almost $150 a barrel in July, but has since slumped as low as $38 as the global economic downturn reduces demand - in turn forcing prices down.