Seven and a half million customers will apparently benefit from the 10% cut British Gas plan to cut its standard tariff by.

The plan will come into force on 19 February, saving the average household £84 per annum. However, the plan will not apply to those on fixed tariffs.

It has been said though that even if other companies follow suit, the move will be “too little too late.”

In 2008, British Gas, which also trades as Scottish Gas in Scotland, raised its prices by 35%, while other companies raised prices by 20% or more.

At the end of last year, the ‘big six’ companies were pushed to pass on lower wholesale prices to customers.

Phil Bentley, British Gas managing director said: “we are committed to providing the best possible prices for customers.
“This price cut will go some way to helping customers to manage their budgets, and we will continue to do what we can, when we can.”

Watchdog Consumer Focus says it thinks British Gas has done the right thing, adding that: “there are millions of dual fuel and electricity only customers that will not see a penny off their bill.
“We will now turn the heat up on the other five companies that are keeping prices sky high.”

Age Concern is worried that unless further cuts are made “many of the poorest pensioners will continue to struggle to pay their energy bills.
“Even with price decreases, millions of the poorest pensioners and families will still be living in fuel poverty and will continue to pay more for their energy than wealthier customers.” The charity’s director Gordon Lishman said.

The cost of wholesale gas is linked to the cost of oil, which has significantly fallen since its peak in summer 2008.

“Consumers would not have to rely on occasional grand gestures by energy companies if the market was more transparent and competitive in the link between wholesale and retail prices,” said Mr Mayo.

Tim Wolfenden, head of home services at price comparison site USwitch.com said British Gas were making a positive first step. He added that by just cutting gas prices and not lowering electricity prices suggested suppliers were feeling cautious, but that other companies were likely to cut their prices fairly soon too.

He said: “it’s going to give some customers a bit of respite at a time of year when they are going to be spending a significant amount on heating their homes.
“Energy price cuts are likely to be too little too late to help consumers with this winter’s fuel bills. More importantly, it is now looking highly unlikely that price cuts are going to wipe out last year’s painful hike in household energy bills,” he added.

He also urges people to look into deals that other companies have going to check there wasn’t a better plan out there for them, especially if they have never switched before.