MORE than seven million homes were promised cheaper energy bills yesterday after British Gas announced its first major price cut in almost two years.

The ten per cent reduction on standard gas tariffs will come into force on February 19, affecting 75 per cent of its customers – 7.5 million homes – and cutting £84 a year from the average gas bill.

Despite the planned decrease, household gas will still be much more expensive than it was last summer.

Industry watchdog Consumer Focus said British Gas customers saw their gas bills rise from £568 at the beginning of last year, to £882 by December – a 55 per cent increase.

British Gas raised its prices after spiralling oil prices caused industry costs to surge. Its last increase in July saw bills up by 35 per cent.

Wholesale gas prices have since retreated after oil dropped from $147 (£106) a barrel to about $35 (£25) as the global economic crisis deepened.

Consumer groups called on other suppliers to follow suit and said there was also room for British Gas owner, Centrica, to announce further cuts.

Gordon Lishman, director general of Age Concern, called the price cut a “step in the right direction” but said many pensioners would continue to struggle to pay energy bills unless further cuts were made.

British Gas said its average gas bill for direct debit customers now stood at £793, down from £877, which includes the ten per cent reduction for all gas customers, except those on fixed tariffs, as well as a new £15 per year prompt payment discount.

British Gas yesterday said the prompt payment discount would apply to customers on standard gas tariffs who pay quarterly from February 19.

Ed Mayo, chief executive of Consumer Focus, welcomed the cut, but said: “We would caution that tariffs are complex, British Gas hasn’t always been the cheapest and consumers need to check if they will get a better deal from this price cut.

“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.”

He said the consumer group would now put pressure on the other major energy suppliers – Scottish Power, EDF, E.On, npower and Scottish and Southern Energy – to follow suit.

Martin Lewis, creator of m o n e y s a v i n g e x p e r t . c o m called the cut “derisory and pathetic” and said energy customers should be seeing reductions in their bills of 20 per cent to 30 per cent.

He urged consumers not to switch provider to British Gas until the other energy suppliers made cuts of their own.

Energy and Climate Change Secretary Ed Miliband said: “It’s welcome that reductions are starting to be passed on to consumers.We look to all energy companies to reduce prices as far and as fast as they can.”