Energy News

British Gas hikes gas prices by 35%

Wednesday 30 July, 2008

By hazel.cottrell@consumerchoices.co.uk

Following EDF's lead, British Gas has announced gas and electricity price rises which leave millions facing increased bills from today

British Gas (www.britishgas.co.uk) owner Centrica has brought panic to millions of customers today by announcing massive price increases, raising the price of gas by 35% and the price of electricity by 9%, with immediate effect.

These changes mean that the average customer who gets both gas and electricity from British Gas will see a 25% rise on their energy bills. 16 million people will be paying an extra £261 a year, or 72p per day, taking the average annual energy bill £1,305.

The rises are the most severe to have hit energy customers this year and follow those of rival EDF Energy, who last week raised the price of gas by 22% and electricity by 17%. It’s expected that price rise announcements from other major suppliers are imminent.

Centrica, which made £2 billion profit last year, blamed higher wholesale prices (the cost that suppliers pay for gas) for the increases, claiming that that wholesale gas prices for the coming winter have increased by 89% on the previous winter, while wholesale electricity prices have increased by 72% over the same period.

Phil Bentley, Managing Director at British Gas said: “We very much regret that we have had to make this decision at a time when many household budgets are already under pressure. The simple fact though, is that we have entered an era of unprecedented high world energy prices. The only answer to cope with higher energy prices, I’m afraid, is for all of us to be more energy efficient and we will be contacting all our British Gas customers to show how they can save energy to try and offset these price rises.”

British Gas confirmed that there would be no further price increases for standard tariff customers in 2008 and has today launched Fixed Price 2011. The new Fixed Price 2011 tariff promises to protect the customer from the impact of further volatility in the wholesale market and will offer customers the opportunity to fix their gas and electricity prices at today’s revised rates until September 2011.

Chris Eagle, Commercial Manager at Energy Choices says: “With energy costs rising, it’s no surprise that British Gas is hiking up its prices. However, I hope Centrica have weighed up costs and pricing carefully, as all eyes will be on its profits at the end of the year.”

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