British Gas Pricing Announcement

British Gas Pricing Announcement

Centrica PLC

BRITISH GAS CUSTOMERS TO BENEFIT FROM IMMEDIATE 5% CUT

IN STANDARD ELECTRICITY PRICES

British Gas cheapest major electricity supplier in Britain

British Gas, the biggest supplier of gas and electricity to homes in Britain, has today announced an average five per cent reduction in its standard domestic electricity prices.

The price cut takes effect immediately and re-establishes British Gas as the cheapest major standard electricity supplier, on average, in Britain.

All 5.3 million British Gas single rate electricity customers on a variable tariff will benefit from the price reduction, each saving an average £24 on their annual electricity bill. In a full year, British Gas electricity customers will save more than £100 million.

British Gas aims to make its prices as competitive as possible and to share the benefit of cost savings with its customers. This reduction in electricity prices builds on the commitment made by British Gas not to raise prices for all its variable rate gas and electricity customers throughout the winter.

Ian Peters, Managing Director, Energy, at British Gas, said:

“We want to keep prices as low as possible for our customers. Household budgets are stretched, and we are doing everything we can to help our customers keep their bills down.

“This price reduction means British Gas is once again offering the cheapest standard electricity, on average, of any major supplier.”

ENDS

Notes to Editors

Cheapest standard electricity is based on UK average annual consumption for single rate electricity comparing standard prices as at 12 January 2012.

Key Facts

Who will benefit from this price reduction?

All our single rate electricity customers on a variable tariff will benefit from this price cut – that’s over 5 million customers.

How much will British Gas customers save on their typical electricity bill?

Our customers will each save an average of £24 a year on their single rate electricity bills.

What action do British Gas customers need to benefit from the price reduction?

We are passing this price cut on with immediate effect – our customers do not need to take any action.

Why haven’t you reduced gas prices as well?

British Gas serves half the homes in Britain. We have to buy energy in advance to protect our customers against any sharp spikes in prices – like we saw last winter. While there have been some short-term falls in the cost of gas, the longer term trend continues to be upward.

Does today’s reduction mean energy prices are now starting to fall and there will not be any price rises later this year?

We are doing everything we can to help our customers keep their bills down, but it is too early to say exactly what will happen to energy prices. Energy bills include a number of costs, many of which are increasing. For example, if you want to buy gas in the wholesale market now for delivery at the end of 2012 it is already trading at a price more than 14 per cent higher than at the end of 2011.

What other parts of the energy bill have increased?

A number of other costs are included in the typical energy bill. These are set either by the Government (environmental and social charges) or the Regulator (transportation costs), and they have increased. Together, with Government taxes, these costs already comprise a substantial part of the average annual dual fuel bill – and will rise from around 36 per cent (or £440) in 2011 to 39 per cent (or around £470) in 2012.

Electricity Price Supplier Comparison

British Gas price reductions since 2009 include average price reductions of:

• 10 per cent Gas price reduction on 19 February 2009
• 10 per cent Electricity price reduction on 7 May 2009
• 7 per cent Gas price reduction on 4 February 2010
• 1 per cent Single Rate Electricity reduction on 28 February 2011
• 5 per cent Single Rate Electricity reduction on 12 January 2012

Contacts

• British Gas Press Office: 0800 10 77 015
• Centrica Investor Relations: 01753 494 900