Citizens Advice has responded to British Gas’s announcement that the supplier is raising prices for customers on a standard variable tariff by 5.5% – an average of £60. It is the second price hike in 8 months from British Gas.
Victoria MacGregor, Director of Energy at Citizens Advice, said “There are serious question marks over whether these price rises are genuinely justified. British Gas recycles Ofgem’s reasoning for recently increasing the prepayment meter price cap, saying that wholesale and policy cost increases are to blame for today’s price hikes. But today’s announcement will see affected customers paying on average between £47 and £72 per year more than the prepayment meter cap – even though it’s cheaper to serve customers who pay by cheque or direct debit.”
“Today’s price rise re-emphasises the need for the Government to act quickly and bring in its cap on poor value default tariffs.”
Peter Earl, Head of Energy, comparethemarket.com said: “The “reluctance” of British Gas to hike its prices will be cold comfort to its customers. The addition of £60 to households bills will be a bitter pill to swallow for many around the UK who have already faced significant increases in costs over the past few years. This hike is further evidence that the energy market is broken. Standard Variable Tariffs are fundamentally bad value and customers of the Big Six, including British Gas, are increasingly taking advantage of the savings on offer elsewhere.”
“The good news is that these high profile hikes are acting as catalysts for shopping around. The last time British Gas hiked prices in August of last year, comparethemarket.com saw a two-and-a-half times increase in switching. This price rise, which will impact over four million customers, is likely to drive another swathe of British Gas customers to other suppliers.”
Georgie Frost, from GoCompare Energy said “British Gas has bookended a very cold Winter with two significant energy price rises. It was only on 15 September 2017 that they increased dual fuel prices by 7.3%, so customers are facing their second price hike in just 8 months – a total increase of 12.8%. Hundreds of thousands of British Gas customers voted with their mouse after the September rise and we can expect more to click and switch again following this news.What tends to happen when one big six energy provider increases prices, is that the rest follow in fairly quick succession.