British Gas to hike energy bills for 4.1m households
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, the company’s owner Centrica, said.
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 urged customers to switch suppliers.
“We are disappointed by British Gas’ announcement of an unjustified price rise in its default tariff when customers are already paying more than they need to,” she said.
“This is why government is introducing a new price cap by this winter to guarantee that consumers are protected from poor value tariffs and further bring down the £1.4b a year consumers have been overpaying the Big Six.
“Switching suppliers will always help consumers get the best deal, saving £308 by switching from a default tariff offered by the Big Six.”
British Gas said its SVT “default tariff” was withdrawn for new customers last month and all existing customers are being “contacted to encourage them to choose one of our fixed-term deals”.
The price hike will not hit 3.7 million customers who are on fixedterm contracts, prepayment meters or classed as vulnerable.
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.
“We continue to work hard to reduce our own costs and keep our prices as low as possible. We have seen other suppliers raise prices and Ofgem increase the level of the prepayment tariff cap largely due to increasing wholesale energy and Government policy costs.
“Government policies, intended to transform the energy system, are important but they are putting pressure on customers’ bills. We believe Government should level the playing field so the customers of all suppliers pay a fair share of energy policy costs.”
Energy firms across the board have been facing pressure for some time over the way they treat customers, with controversy over pricing and the use of standard variable tariffs which have been deemed poor value for consumers.
MoneySavingExpert founder Martin Lewis said that the British Gas price hike raises the prospect of other firms following suit.
“I suspect we will see some of the others follow suit, not solely because of cost increases, but because in a PR sense, now British Gas will face the full first-mover flak, they can sneak in afterwards knowing it’ll be less of a hit.”