Families and businesses in Northern Ireland were today given some welcome relief heading into the winter months as it was announced that gas prices are to be cut by almost a fifth.

Phoenix Natural Gas said the 19% reduction in tariffs, effective from October 1, would cut the average domestic gas bill by £104 a year, giving its customers an average yearly bill of £437 or £8.40 a week.

It is the second time Phoenix has lowered its prices in nine months following a 22.1% decrease at the start of the year and takes prices back to 2006 levels.

David Strahan, general manager of Phoenix Supply, said: “We made a commitment to our customers in January that should the wholesale cost of gas continue to fall we would, once again, reduce prices accordingly. This is a promise we have kept.”

The Belfast Telegraph’s Price Watch campaign has been at the forefront of the fight for fairer gas, oil and electricity prices, and the reduction by Phoenix has raised hopes that electricity customers may be in for good news when Northern Ireland Electricity announces new tariffs next week.

Today’s price cuts followed consultation with the Utility Regulator, the Consumer Council for Northern Ireland and the Department for Enterprise, Trade and Investment. Chief executive for the regulator Iain Osborne said it had moved to ensure a drop in wholesale gas prices was quickly passed on to consumers.

“Gas customers in the Greater Belfast area are now paying bills that are back to 2006 levels, and that compare favourably to the Republic and to the rest of the UK,” he said.

The Consumer Council said the cuts will provide much-needed relief for over 100,000 Phoenix Supply customers, mainly in the Greater Belfast area.

However, chief executive Antoinette McKeown said: “In 2008 Phoenix customers suffered from significant increases on their bills, which caused the Consumer Council serious concern. Today’s decrease reduces gas prices to a level lower than in 2006 and puts a price in place for the next 18 months, bringing much-needed stability for many consumers here.”

“Today’s announcement is good news for Phoenix customers. However, we must put it in context; Phoenix customers represent 17% of households in Northern Ireland in contrast to around 70% of homes that use oil. Oil is subject to much greater price volatility, making it harder for families to budget effectively.

"The Consumer Council wants to see open and transparent pricing when it comes to oil."

Prices for home heating oil have fallen by 33% in the last 12 months but have increased by 8% since January and remain higher than they were three years ago.

Official figures state that 34% of households in Northern Ireland are currently in fuel poverty, but the Council believes this number could be as much as 50%.

Northern Ireland Electricity is set to announce its new tariffs next week.

Industry sources told the Belfast Telegraph earlier this month that householders could expect a reduction of up to 5%.

Alliance Party Enterprise spokesman Sean Neeson challenged Northern Ireland Electricity to make a larger price cut.

“If Phoenix is able to make cuts then NIE must follow their lead. There can be no excuse not to reduce electricity prices by a similar level now,” Mr Neeson said.

DUP MLA Jim Wells also called for NIE to make sizeable cuts to its prices.

“NIE have always said that there prices are pegged to the price of gas: now that gas has fallen a fall in similar proportions should be seen from NIE,” he said.