The cut will be available from the end of March and follows cuts from other big six suppliers SSE, Eon and Scottish Power in light of falling wholesale gas prices.
RWE Npower chief executive Paul Coffey said: “This cut in gas prices is welcome news for many of our customers. We have balanced the wholesale price fall against increases in the other costs we are charged.”
The reduction will impact approximately 1.2 million of its customers and brings the standard domestic gas tariff down to an average of £591 per year, down from £623.
Secretary of state for energy and climate change, Amber Rudd said: “Npower is now the fourth of the Big Six to take a step in the right direction by dropping its standard gas price and I urge other suppliers to follow suit.
“I’m absolutely clear that energy suppliers must give consumers a fair deal and that’s why I’ve been calling on energy companies to put their customers first and pass on savings to them.
“The government is also taking action to keep bills low by making it easier and quicker to switch, rolling out smart meters to every home and business, and increasing competition in the energy market”.