Centrica’s British Gas Cuts U.K. Household Gas Price 5% on Costs

British Gas Controversially Increases Its Energy Prices
Photographer: Christopher Furlong/Getty Images

British Gas, the retail unit of Centrica Plc, cut household natural gas prices by 5 percent to reflect lower costs.

The price reduction, which becomes effective from Aug. 27, will lower annual energy bills by an average of 35 pounds ($55), and follows a cut in January, British Gas said in an e-mailed statement Wednesday. Electricity prices remain unchanged.

“This reduction reflects our lower projected total costs for 2015 and 2016,” Mark Hodges, managing director of British Gas, said in the statement.

Wholesale gas prices declined amid abundant supply of the fuel in Europe as lower demand in Asia saw more liquefied natural gas tankers arrive in Britain, while a drop in Europe’s oil-linked contract prices made more fuel available from countries such as Russia. Front-month gas in the U.K., the regional benchmark, is trading 16 percent below its five-year average on the ICE Futures Europe exchange.

Centrica, the biggest supplier of energy to U.K. households, rose 0.3 percent to 278.1 pence by 9:58 a.m. London time.

Read this next:

Before it's here, it's on the Bloomberg Terminal. LEARN MORE