British Gas is to cut its prices by 10 percent from next month, the energy provider announced on Thursday, putting pressure on rival companies to follow suit, according to AFP.
The company said the cut for gas prices starting on February 19 would benefit 75 percent of its customers -- or 7.5 million homes -- saving customers 84 pounds on an average annual household gas bill.
British Gas raised its prices by 35 percent last July when energy prices reached record highs and crude oil peaked at 147 dollars a barrel.
But prices have since plummeted as demand for energy falls in the wake of the global economic slowdown.
Although the price of wholesale gas almost doubled last year, the company said it bought gas in advance, allowing it to mitigate some of the sharp rises, including as a result of the recent gas crisis between Russia and the Ukraine.
"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," said British Gas managing director Phil Bentley.
The reductions will not apply to those customers on fixed tariffs.
Britain`s second biggest energy supplier, Scottish & Southern Energy, said in November it hoped to cut household energy bills early in the year.