E.On is cutting its standard gas prices by 3.5%, equivalent to £24 off an average annual household gas bill.
The price cut will take place with immediate effect. German-owned E.On supplies gas and electricity to five million homes in the UK.
Tony Cocker, chief executive of E.On UK, said “We are the first supplier to reflect through our standard tariff the overall drop in wholesale gas prices.”
Firms are under pressure to cut prices as wholesale energy costs have fallen.
At the weekend, Matthew Hancock, the Business, Energy and Enterprise Minister, wrote to the six biggest energy companies demanding price cuts because wholesale gas prices are 30% lower than a year earlier.
Labour leader Ed Miliband has said energy regulator Ofgem should be given new powers to force firms to cut gas and electricity bills when wholesale prices drop. Labour has also promised a price freeze in domestic energy were it to win power.
Source BBC News