Energy firms have come under pressure to cut prices.
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Scottish and Southern Energy (SSE) has said it will cut prices for electricity and gas customers from 30 March.
It said average prices for electricity customers would fall by 9% and average gas bills would be trimmed by 4% - the first price cut since March 2007.
The firm also supplies energy under the brand names Southern Electric, Swalec, Scottish Hydro Electric and Atlantic.
The announcement followed the decision by British Gas to cut gas bills by 10% from 19 February.
"Dual fuel" customers would see an average annual saving of �66, the company said.
SSE said that the falls in energy prices on wholesale markets had been maintained, allowing it to deliver a price cut.
However, the firm warned that prices remain at relatively high levels.
Electricity and gas prices are still 46% and 51% higher than two years ago, it said.
"The UK now relies on energy imports and wholesale prices for electricity and gas are still at historically high levels," said Alistair Phillips-Davies, SSE's energy supply director.
Price war
At the end of last year the "big six" energy companies were urged by the government to pass on lower wholesale gas prices.
Scottish and Southern said that customers on its dual fuel tariff would pay 10% less than British Gas customers before its rival's price reduction on 19 February, and 4% less after.
However, British Gas called Scottish and Southern's comparison "disingenuous" and urged its competitor to clarify its figures.
Phil Bentley, managing director of British Gas, said: "We are disappointed by the way SSE has compared its new prices with our old prices, creating a price difference that will never exist - especially as our price cut takes effect on 19 February, and the SSE cut does not apply until 30 March."
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