In 1992 the changing of the gas industry continued with competition opened up for industrial and commercial customers who used between 2,500 and 25,000 therms of gas per annum. A range of alternative suppliers entered the British Gas market to supply these business customers and larger gas consumers.

At the same time British Gas asked for a Monopolies and Mergers Commission (MMC) inquiry to look at equality between the needs of customers, shareholders, suppliers and employees. When the MMC first published its report in 1993 its proposals were rejected but, prompted by the contents, the Government decided to open domestic gas market to competition by 1996.

This represented a major change in the nature of the market and to respond British Gas carried out a major internal restructuring to prepare the UK gas business for the onset of this new competition. Five business units were formed, each with a specific national responsibility.

Gas competition first opened up in part of the south west of England in April 1996 with 500,000 customers in Devon, Cornwall and part of Somerset able to choose an alternative gas supplier. This change continued to roll out and by the end of May 1998 the entire market was open to competition.

With these significant changes occurring in the gas industry, British Gas announced plans in 1996 to demerge its gas trading businesses. This was a recognition of the need to ensure a greater focus within particular areas of the gas business.

As a result British Gas plc was demerged to form two separate companies on 17 February 1997 and these were Centrica plc  and BG plc.

This was not the final restructuring as in December 1999, BG plc completed a financial restructuring which resulted in the creation of a new parent company BG Group plc.  Morer changes followed when BG Group plc subsequently demerged in 2000 to create two new companies BG Group plc and Lattice Group plc.