British Gas Statement on Energy Prices

Centrica PLC
                  8 February 2007

CENTRICA PLC: BRITISH GAS ANNOUNCES ENERGY PRICE CUTS

British Gas today became the first major energy supplier in the UK to announce a
reduction in its tariffs for residential gas and electricity customers. From 12
March 2007 British Gas will cut its standard tariffs for gas by 17 per cent and
for electricity by 11 per cent. As a result, the average annual dual fuel bill
for its customers will fall by £167 to £953(1).

For the overwhelming majority of UK energy customers, British Gas will be the
cheapest gas supplier. Its Click Energy 2 online tariff will be the cheapest
dual fuel energy price available in the market.(2)

British Gas is also launching the UK's largest social tariff, the Essentials
Tariff, at a cost of £40 million per annum. Essentials will lower gas and
electricity bills further still for up to 750,000 customers defined by the
Government as vulnerable. Prepayment meter customers who qualify for Essentials
will see their energy bills drop by 24.6% or £285 per annum.(3)

Phil Bentley, Managing Director designate, British Gas said: 'Not only are we
now the cheapest energy supplier both for gas and for dual fuel across Britain,
we are also the greenest(4). We are taking the lead in passing on the benefits
of falling wholesale gas prices. As a result of this move our customers will be
better off and for many vulnerable households that struggle to balance their
bills, our social tariff will remove the burden of not being able to access our
cheapest prices, typically direct debit, irrespective of their method of
payment.'

Sam Laidlaw, Chief Executive, Centrica said: 'The billions of pounds we have
committed to gas contracts underpinned the construction of new undersea
pipelines that are now delivering additional gas supplies to the UK. These new
supplies of gas have directly led to the fall in wholesale prices which we can
now pass on to our customers. Our price cut still enables British Gas to make a
sustainable margin in 2007 and allows for further investments in the future.'

As a further measure for customers seeking reassurance over volatile energy
prices in the future, British Gas is also launching a new product called Price
Guarantee 2008. At no extra premium and with no early exit penalty, customers
who take this product will be guaranteed our new cheaper prices until 31 May
2008.

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*T
Dual Fuel prices   Direct Debit     Cash /cheque     Pre Payment
 as 12/3/07
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British Gas        £874.44          £953.02          £1034.80
-----------------------------------------------------------------------
Average competitor £930.47          £991.18          £1051.98
-----------------------------------------------------------------------
npower             £965.75          £1028.75         £1122.35
-----------------------------------------------------------------------
Bills are based on industry average annual consumption of 20,500 kWh
 for gas and 3,300 kWh for single-rate metered electricity
-----------------------------------------------------------------------
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Ends

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Media Relations Contacts:
Alan McLaughlin: 01753 494105/07789570598
Andrew Turpin: 01753 494088/07979565125
Anne Morton: 01753 494106/07979566274

Centrica Investor Relations: 01753 494900
*T

Notes to Editors

All price comparisons are based on industry standard average annual gas
consumption of 20,500 kWh and electricity consumption of 3,300 kWh on a single
rate credit meter (except 3 below), are rounded and include VAT at 5%. Assumes
all quarterly bills paid within 28 days of bill issue date. Excludes any prompt
payment discount that may be available from other suppliers. Electricity price
reductions averaged across all electricity regions - actual decrease will vary
by region and meter type.

1.Based on payment quarterly by cash or cheque.

2.Based on a comparison on uSwitch (excluding social tariffs) as at 7 February
based on our prices as at 12 March in each region.

3.Compares prepayment tariffs as at 11th March 2007 to monthly direct debit
tariff as of 12th March 2007 at the same gas and electricity consumption.

4.British Gas has the most carbon-efficient power generation of all the major UK
suppliers. The annual CO2 emissions from British Gas customers using 3,300Kwh
electricity annually is 1.17 tonnes/pa. The average CO2 emissions from other
major suppliers' customers is 1.814 tonnes/pa, or 55% higher.

Phil Bentley is currently Chief Financial Officer of Centrica plc, the parent
company of British Gas. He will take up his new role as Managing Director of
British Gas at the end of this month.