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British Gas cuts prices by 5%: will businesses get cheaper gas?


After a critical report from the Competition and Markets Authority, British Gas has pledged a 5% cut for domestic customers. What does this mean for SMEs?

British Gas is the first of the ‘Big Six’ energy suppliers to announce a cut in customer prices, which will fall by 5% from the end of August. Many see the move as a response to a report from the Competition and Markets Authority (CMA) that found both households and businesses are paying too much.

But commenting on the cut, Stephen Beynon, the Managing Director of British Gas residential business, denied it was due to political pressure, claiming instead it “reflects our lower projected total costs in 2015 and 2016. We know our prices have to be competitive if we’re to keep our existing customers and win new ones – so we’ll reduce our prices for customers whenever we’re able to.”

Cheaper gas bills

While the reduction was welcomed by some, others claimed that the 5% cut is not enough. According to one expert quoted in the Guardian, its customers will still be paying £70 a year too much for their energy. The price of electricity supplied by British Gas will be unchanged.

British Gas’s Beynon noted that British Gas already cut prices by 5% back in February, making this the second time British Gas has reduced prices this year. Other Big Six providers are expected to follow with their own cuts.

Best business energy

Mention of non-domestic users – i.e. businesses – was conspicuously absent. Nevertheless, the circumstances that have prompted British Gas to lower its prices (a cheaper wholesale gas rate) and an increasing number of suppliers mean that a better deal is almost certainly out there for most businesses.

Unlike the consumer market, business energy tariffs are still very much open to negotiation and dependent on individual circumstances, including usage and location. While larger corporates have dedicated procurement departments to take care of getting the best prices for business energy, small to medium sized businesses generally lack the time to trawl through quotes and negotiate with suppliers.

At SwitchMyBusiness.com we understand that you have a lot better things to do than compare gas and electricity tariffs. We can offer a comprehensive market comparison and switch you to a new supplier in just 20 minutes. Give us a call on 0330 0100 251 or fill in the form on the top right of the page and find out why we are the top rated business energy compare and switch site.

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