Step 1: Use convenient numbers.
Expenditure equals price times consumption. To avoid fractions, take the original price as 100 per unit and original consumption as 100 units, so the original spend is $100 \times 100 = 10000$.
Step 2: Raise the price.
A 16 percent rise makes the new price $100 + 16 = 116$ per unit.
Step 3: Keep spending fixed.
To hold the bill at 10000 with the new price 116, the new consumption must be $\dfrac{10000}{116}$ units.
Step 4: Find the new consumption.
$\dfrac{10000}{116} \approx 86.21$ units.
Step 5: Measure the cut.
Consumption falls from 100 to about 86.21 units, a drop of about $13.79$ units, which on a base of 100 is a $13.79$ percent reduction.
Step 6: Confirm with the shortcut.
The formula $\dfrac{x}{100+x}\times 100 = \dfrac{16}{116}\times 100 \approx 13.79\%$ agrees, matching option 1.
\[ \boxed{13.79\%} \]