British Gas Electricity Price Rises

British Gas will increase electricity prices by 12.5% from September, the company announced yesterday. The change is expected to affect 3.1 million customers, but the most ‘vulnerable customers’ would be protected against the rise, as British Gas has pledged to credit 200,000 people on the Government’s Warm Home Discount with £76.

The company’s gas prices will be held at their current level. Nevertheless, the average annual dual-fuel bill for a typical household on a standard tariff will rise by £76 to £1,120, up by 7.3%. In an effort to justify the decision, British Gas owner Centrica have said that it was one of the last suppliers to raise electricity prices, as it this will be the first increase since late 2013. Iain Conn, Centrica’s Chief Executive, stated that the wholesale costs were not the reason for the price increase. Instead, ‘It is transmission and distribution of electricity to the home and government policy that are driving our price increase... We are selling electricity at a loss and that is not sustainable.’

The Government has responded saying its policy costs ‘could not explain’ the rises. Consumer magazine Which? urged British Gas customers on the standard variable tariff deal to switch to another provider immediately after the announcement was made. Meanwhile, shadow energy secretary Alan Whitehead has criticised the Government for not going ahead with the proposed pre-election pledge to impose a price cap on energy costs. The statement was made as the gas and energy provider revealed that it lost 377,000 customer accounts in the first half of 2017 and profits from its UK energy home energy supply division fell by 26%.