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British Gas hikes energy bills for millions for second time in months

Paloma Kubiak
Written By:
Paloma Kubiak

More than three million British Gas customers on its standard variable tariff will see bills rise by an average of £44 a year.

The energy giant today announced the average bill for its 3.5 million default tariff customers will rise by 3.8%, taking the typical dual fuel bill to £1,205.

The increase will take effect on 1 October after British Gas cited the “rapid increase in wholesale energy costs since early April” which accounts for an approximately 20% rise.

The ‘Big Six’ energy supplier last hiked bills for its standard variable tariff customers in May, after it withdrew this tariff for all new customers in March.

Since the start of the year, it said the numbers on its default tariff have fallen from 4.3 million to 3.5 million, and it expects to have 3 million on this deal by the end of the year.

Any customer who doesn’t actively choose a new deal after their fixed-term tariff comes to an end will roll onto its new default 12-month fixed-term Temporary Tariff which has no exit fees – to encourage customers to switch away from the SVT.

However, this tariff will increase from £1,136 to £1,180 from 1 October, which is £25 less than the SVT.

Centrica-owned British Gas confirms its 2.4 million customers on fixed price products will be unaffected by the price hike.

Mark Hodges, chief executive, Centrica Consumer, said: “We have reluctantly announced plans for an increase in our Standard Variable Tariff (SVT). We understand that any price increase adds extra pressure on customers’ household bills. However, this reflects the sharp rise in wholesale energy costs.

“In response to rapidly rising wholesale market costs, since April a number of other energy supply companies have increased their SVT prices and Ofgem have also announced a second increase to the prepayment meter cap.

“As well as providing more choice, we are striving to improve customer service levels, reducing our own costs and rewarding customers.”

In June, E.ON announced it was increasing the price of its standard variable electricity and gas tariffs from 16 August, blaming the ‘Beast from the East’ and higher wholesale energy costs.