British Gas has announced a12.5% electricity price increase commencing in mid-September. British Gas owner Centrica has blamed the price hike on rising costs a move which will affect 3.1 million customers.
Ben Wilson, Energy Spokesperson for GoCompare said “Wholesale energy costs have fallen but British Gas still try to justify an electricity price increase nearly five times above the level of inflation. In our view there’s no excuse for hitting customers with this level of increase and it’s an additional slap in the face to impose it just when temperatures will drop and demand will go up. What’s worse is that this will affect those already paying too much for their electricity; the 3.1m customers on British Gas’s standard variable tariff.
“In a recent in-depth study we calculated that UK households who stick with expensive tariffs and don’t switch to better deals are over £925m a year worse off. That’s a staggering figure but it’s easy to see how these sums add up. This increase from British Gas will add £76 a year to an average British Gas dual fuel customer’s bill. Multiply that by 3.1m customers facing the increase and that’s a tasty £235m boost to British Gas’s income at the expense of loyal bill payers.”
Chief Executive of Citizens Advice Gillian Guy said “Customers of all large energy firms have now seen their bills rise this year so it is clear that something needs to change. British Gas has in recent years been offering one of the less expensive standard variable tariffs from a larger firm, but today’s price rise will close this gap and hit long standing customers hardest. This price rise has been issued despite costs for energy firms dropping in recent months. “It is positive that British Gas has chosen to credit 200,000 of its most vulnerable customers with £76 to offset its price rise this winter – but this underlines the need for a long-term solution to protect loyal customers of all firms.”
“Capping energy bills for those eligible for the Warm Home Discount would protect the poorest families and pensioners across the board – which is why Ofgem’s proposed safeguard tariff is the right approach. We want this to be matched by the introduction of yearly targets for suppliers to move their customers off the more expensive standard variable tariff – and a deadline after which anyone who hasn’t switched for 3 years would also have their bills capped.”
Stephen Murray, Energy Expert, MoneySuperMarket, said “This announcement from British Gas must be one of the worst kept secrets in the history of the energy industry. This announcement had an air of inevitability and customers on standard tariffs will now continue to see their prices go up at a time when the cheapest deals in the market have started to fall.”
“The summer months are a time when many people take their eye off their energy bills and there is a danger that millions of British Gas customers will miss this or shrug their shoulders in passive acceptance. But they will really feel the impact when the big winter bills start to come through and they are paying hundreds of pounds more than savvy consumers who have moved away from incredibly expensive standard tariffs.”