E.ON has announced it will reduce its standard household gas prices by 5.1%.
It is the first Big Six energy supplier to cut prices this year.
The reduction, which will come into effect on 1st February, will take £32 off an annual gas bill – equivalent to three weeks’ of usage, it claims.
That takes the average bill to £1,047.
The company has also launched what it claims is the cheapest one year dual fuel fixed energy tariff on the market, with the average annual price of £783.
Around 4.5 million of E.ON customers can switch tariffs without paying an exit fee.
It adds its two-year Age UK fixed tariff is exclusively available to people over 60 years and is also claimed to be the cheapest of its kind.
The news follows Ofgem Chief Executive Dermot Nolan saying energy companies are overcharging customers.
Tony Cocker, Chief Executive of E.ON UK said: “Today’s action once again makes our standard tariff the cheapest variable offering of any of the larger suppliers and our new one year fixed tariff is simply the cheapest product of its type on the market today.
“The underlying position is that whilst the price we pay for our customers’ energy has fallen, we also have to take account of managing the various other risks in the market which can change… Once you’ve built in various uncertainties and other factors, whilst the wholesale market movements may translate across to a dual fuel domestic bill for a drop in prices of under 10%, the inclusion of those other factors translates the percentage to the standard gas cut announced today. We will continue to keep all these factors under review.”