British Gas set to hike bills for 4.1m homes

ENERGY: Firm cites increased wholesale gas and electricity costs and legislation

British Gas is to increase energy bills for 4.1 million dual fuel customers on its standard variable tariff (SVT) by an average of 5.5%, or £60 a year, blaming rising wholesale energy and Government policy costs.

The price of British Gas’s SVT will rise to £1,161-a-year for a typical dual fuel customer, said the company’s owner Centrica.

British Gas cited increased wholesale gas and electricity costs and the price of Tory policies as being behind its latest hike.

It blamed initiatives such as the smart meter roll-out and schemes to reduce carbon emissions, and argued that the funding of “all Government policy costs should be paid for in a fairer way such as through general taxation”.

British Gas announced plans in November to scrap SVTs for new customers ahead of Government plans to impose a price cap on costly energy products, which Centrica warned could have “unintended consequences” for the market.

But the Government issued a firm rebuttal, with energy minister Claire Perry describing the hike as “unjustified” and urging customers to switch suppliers.

“We are disappointed by British Gas’s announcement of an unjustified price rise in its default tariff when customers are already paying more than they need to,” she said.

British Gas chief executive Mark Hodges said: “We fully understand that any price increase adds extra pressure on customers’ household bills. This increase we are announcing today is reflective of the costs we are seeing which are beyond our control.”