British Gas is the first of the big energy suppliers in the UK to cut its gas prices.

British Gas has announced a 7% price cut across its standard gas tariffs just a day after Ofgem – the energy regulator – said that domestic bills could rise by as much as 25% in the next 10 years. 

Britain’s biggest supplier of domestic gas says the price cut, which takes effect immediately, will benefit up to 8 million households.

“At British Gas we know household budgets are stretched, and that our customers are concerned about the effect the recent cold weather will have on their winter fuel bills,” said British Gas Managing Director, Phil Bentley.

“I’m pleased we’re able to offer our customers some extra help with this gas price cut – and that we’re able to do this while it’s still winter, allowing our customers to really feel the benefit,” he added.

The third price cut in the last 12 months means that British Gas customers have saved around £187 off the price of the average annual dual fuel bill.

British Gas added that it has also removed the ‘differential’ for gas pre-payment meter accounts which means that pre-pay customers are now paying, on average, the same for their energy as those who pay by cheque or cash. 

uSwitch.com’s Director of Consumer Policy, Ann Robinson, said many people have been choosing to use less heat with fear of the cost of bills despite one of the UK’s coldest winters on record.

“Prices rocketed by 42% or £381 in 2009 and dropped last year by 4% or £54. If suppliers do not intend to cut their prices again this needs to be explained quickly, clearly and openly to consumers who might otherwise be left feeling short-changed.”

MoneySavingExpert.com Founder, Martin Lewis, said it is likely other suppliers will follow suit: “While any price cut is welcome, 7% isn’t special and the fact it’s on gas means it’s a few pennies in the piggy bank not a deposit in the bank.

“Energy companies are like sheep though. When one moves, the others bleat and follow – so it’s likely we’ll see rivals shave the cost of their standard tariffs in the next couple of months.”

A statement on npower’s website said that while it was reviewing today’s announcement by British Gas it always “aims to be competitive and provide good value”.