British Gas said that it was the only major supplier to have cut gas prices three times since the beginning of 2015 and that, as a result, its customers were paying on average almost £100 less on gas each year than they were 13 months ago.
The company admitted it was not quite the cheapest offering on the market, however, but said it would be cheaper than 95% of the market, for a typical household on a standard dual fuel tariff, once the price cut kicks in.
“Competitive pricing is the way to retain existing customers and win new business in this hard-fought market,” said Mark Hodges, chief executive of British Gas's Energy Supply & Services for the UK & Ireland.
British Gas has also reduced prices on all its currently available fixed tariffs, ensuring customers on these deals also benefit from the saving.
Customers on older fixed-rate tariffs that are no longer on sale can also switch, without charge, to one of the current tariffs.
British Gas's two previous price cuts were both 5%. Over the last year wholesale natural gas prices in the UK have fallen by around 39%.
British Gas rival EDF Energy was quick to respond and also announced a cut in prices on Thursday; its 5% reduction is set to come into effect on 24 March.
"Our prices are under constant review and today’s announcement reflects falls in wholesale gas costs. There are other costs impacting customers’ energy bills that are beyond our control – these increased steadily during 2015,” said Beatrice Bigois, managing director of customers at EDF Energy.
Martin Lewis, the founder of the moneysavingexpert.com web site, described British Gas's 5% gas-only price cut as “paltry”, and said in a message on social networking site that the Big Six energy suppliers were still “ripping off” energy users to the tune of £300 a year in comparison to cheaper suppliers.