British Gas and EDF fall into line with UK gas price cuts

By Oleg Vukmanovic and Li-mei Hoang LONDON (Reuters) - British Gas and EDF Energy , two of Britain's largest household energy suppliers, bowed to pressure from regulators and rivals by cutting domestic gas prices on Thursday. But the cuts, which follow similar moves by other suppliers in January, only come into effect next month, when peak demand due to colder winter weather is likely to have passed. A 57-percent drop in wholesale gas prices since this time last year has put pressure on Britain's Big Six energy suppliers to pass on cost savings to retail customers. "Seeing all of the big suppliers mirror each other with small cuts in the face of falling wholesale prices will raise questions in many people's minds about whether competition is working in this market," Richard Lloyd, executive director at consumer group Which? said. Responding to the latest round of cuts, Britain's Energy and Climate Change Secretary Amber Rudd on Thursday said there was still more to do. Suppliers are awaiting the outcome of a competition watchdog investigation set to conclude in June, which Rudd said will help determine if consumers are getting a "rough deal." British Gas said it will cut gas prices by 5.1 percent from March 16, followed by EDF Energy which said it would make a 5 percent reduction from March 24. Rivals SSE , E.ON , Scottish Power and RWE npower have announced price cuts for domestic gas prices of 5.3, 5.1, 4.8 and 5.1 percent respectively. It is the third time British Gas has lowered its prices since the start of last year, which it said would result in an overall reduction of 14 percent. "Competitive pricing is the way to retain existing customers and win new business in this hard-fought market," said Centrica's Mark Hodges, chief executive of its Energy Supply & Services in UK and Ireland. EDF Energy said its cut was linked to falls in wholesale gas prices, owing to a global gas supply glut, but added that rising costs elsewhere prevented deeper price reductions. Of the price cuts announced by the big suppliers, only E.ON's takes effect in February, when households spend more due to cold temperatures. All the other cuts fall in March. British households will not benefit from a fall in market electricity prices because their suppliers are facing rising costs, such as green energy subsidies, which they say cancel out a 30 percent drop in prices since August 2014. "With cuts being announced to gas tariffs, suppliers will likely attract regulatory scrutiny for their lack of action on electricity prices," Jefferies equity analyst Peter Atherton wrote in a note. Shares in British Gas parent Centrica fell 3.8 percent by 1214 GMT on Thursday, at 183.9 pence, while France's EDF traded 2.21 percent lower at 10.28 euros. (Reporting by Li-mei Hoang and Oleg Vukmanovic in Milan; Editing by Alexander Smith)