Scottish and Southern Energy has become the second company this week to slash gas and electricity bills.
The company announced a 12% cut in its average gas bill and a 5% fall in average electricity prices just 24 hours after Powergen also announced lower prices.
But Scottish and Southern's introduction of lower gas rates from Thursday will mean that its customers will be the first to benefit from lower bills.
Electricity bills will fall from April 1.
British Gas price cuts - which sparked the price war three weeks ago - will not come into force until March 12, while npower and Powergen are waiting until April 30 to bring in the new tariffs.
Scottish and Southern - the UK's third largest energy supplier - said the move would benefit its 7.5 million customers and claimed that the cuts would make it the cheapest supplier in the UK.
A company spokesman said: "We promised to blow British Gas out of the water and we have done that on price, timing and our responsible approach to pricing."
It said that average dual fuel bills for customers buying both electricity and gas would fall by 9% to £873 - £80 cheaper than British Gas and £40 cheaper than Powergen's new prices revealed on Tuesday.
The company added that it would drop termination fees for existing customers who had signed up to fixed-rate bills due to fears over energy prices spiralling ever further.
Scottish and Southern is the fourth member of the "big six" to announce price cuts, with just Scottish Power and EDF Energy left to enter the fray.
