British Gas increases household energy prices
British Gas, Britain's biggest energy supplier, has today announced that it is putting its prices up by 9.2% or £131 for gas and electricity, despite pledging in May to use cold weather profits to keep its prices steady for as long as possible. The announcement comes just a week after SSE announced its increase of 8.2% or £106 for gas and electricity, coming into effect 15th November.
British Gas' hike comes into effect on 23rd November and is expected to hit 7.8 million customers. It will add an extra £131 to British Gas' average standard dual fuel bill, which will increase from £1,340 to £1,471 as a result.
As well as seeming to backtrack on what many customers would have seen as a ‘price promise', the move will be a blow as it follows a previous price hike made only in November last year. At the time the company warned of the potential for further increases this year. However, British Gas subsequently reported an 11% year-on-year increase in profits for its residential supply arm, resulting in it facing calls to cut prices again to alleviate the pressure on customers.
Today's news suggests that these calls have fallen on deaf ears. The supplier has blamed the increasing cost of buying energy in global markets, delivering gas and electricity to the home, and the Government's social and environmental programmes, which are paid for through customers' bills but the move also paves the way for other suppliers to increase their prices too - none of the remaining big six suppliers have committed to a price freeze.
Tom Lyon, energy expert at uSwitch.com, says: "Today's price hike will be seen by many as a broken promise. British Gas customers have had the rug pulled from under their feet and I suspect that many will be feeling let down and betrayed. Adding a further £131 to an already sky-high energy bill will leave many buckling, but the real damage will be to trust.
"Now that Britain's two biggest suppliers have announced there is nothing to stop the others from following suit. The question now is whether it will be a trickle or a stampede. However, the fact is that households will be struggling to afford to keep warm this winter.
"If you want to protect yourself then the time for action is now. There are some great fixed price deals on the market which can protect you from price hikes for anything up to four winters. This protection could be extremely valuable for those on a tight budget and could make all the difference in being able to afford to keep warm. As well as reducing the cost of your energy, now is also the time to reduce the amount you use - not by going cold, but by making your home as energy efficient as possible."