Electric Ireland is set to reduce the price of gas by 5% for its residential customers.

The cut, which will take effect from next month, will reduce the average annual gas bill by almost €40.

It's the third reduction in residential gas prices in the past 18 months, reflecting the decline in global energy prices overall, with savings of €80 delivered to customers during this period.

Electric Ireland accounts for roughly 25% of the Irish market, with around 150,000 gas customers. 

The company will now have the lowest priced standard gas rate and lowest priced standard dual fuel rates in the market. 

Electric Ireland executive director Jim Dollard said:

"This announcement means Electric Ireland dual fuel (gas and electricity) customers will have saved €188 through six separate reductions in electricity and gas prices in the last two years (including) the 6% decrease in electricity unit prices last June."