Millions of British Gas customers to be hit by price hike
Customers on its standard variable tariff will see typical dual fuel bills increase by an average of £60 to £1,161 a year – a £30 rise for both gas and electricity.
The price rise – effecting 4.1 million customers, including those under its white label, Sainsbury’s Energy – takes effect from 29 May but British Gas confirmed 3.7 million customers on fixed-term deals, prepayment meters and those considered “vulnerable”, will not be impacted.
The energy giant said it has “reluctantly” announced plans for the increase on default tariffs due to rising wholesale and policy costs which are “beyond its control”.
However, analysis of Ofgem data by auto-switching service Look After My Bills, revealed that the current costs energy companies pay to supply households are lower than their peak in December 2016.
Ed Molyneux, head of research at the firm, said: “The data is clear, there is simply no justification for price hikes now, especially when British Gas put its prices up last year. Costs are still under the peak that triggered the first round of price rises last year.
“This is a slap in the face for British Gas customers and it is clear the government is not acting quickly enough to stop it. We urge British Gas customers to switch away as soon as possible.”
Comparison site MoneySuperMarket said there are currently 30 tariffs available that are £250 or more cheaper than the energy giant’s standard variable tariff.
And as we saw last year, now that British Gas has raised prices, there are concerns other energy firms are likely to follow suit.
British Gas this month scrapped its default energy tariff for new customers and it has introduced a new fixed-term default tariff – the Temporary Tariff – to encourage customers to switch away from the SVT. However, this will increase by £60 to £1,136, just £25 less than the standard tariff.
Mark Hodges, CEO of Centric Consumer, said: “We fully understand that any price increase adds extra pressure on customers’ household bills.
“Eleven other energy suppliers have also had to increase the price of their standard tariff recently due to rising wholesale and policy costs including the smart meter roll out and schemes to reduce carbon emissions.
“Government’s energy policies are important but they are also pushing up customers’ bills. We believe government should level the playing field so the customers of all suppliers pay a fair share of energy policy costs. We continue to encourage government to consider moving these costs out of energy bills altogether and into general taxation.”