Energy News

British Gas launches Tracker Tariff

Wednesday 25 July, 2008

The energy giant has launched a new tariff where customer’s bills will be linked to wholesale prices and adjusted every quarter.

The British Gas (www.britishgas.co.uk) Market Tracker will monitor commodity prices and reflect any movements in customer’s quarterly bills - much like tracker mortgages that are linked to the Bank of England base rate.

Despite a recent price war in the energy markets this year, wholesale prices had been falling for months before any reductions were offered to customers paying retail prices.

Phil Bentley, British Gas Managing Director, said: “Traditionally energy companies smooth the changes in commodity costs over a period of time to protect customers from volatility in the wholesale market. This new product is for those people who understand and accept the risk that their bills could move up or down far more frequently - but they are guaranteed that their bills are reviewed every quarter.”

The Market Tracker will begin monitoring prices from 1 September 2007 until 31 August and prices will be reviewed on 4 December 2007, 4 March 2008 and 3 June 2008. Customers will be able to opt out of the tariff at any time without a penalty.

Chris Eagle, EnergyChoices.co.uk commercial manager said: “Energy suppliers have been criticised for stalling for months before passing on wholesale price cuts to customers. Tracker tariffs like this and npower’s (www.npower.com) similar price plan are attempting to address this issue although a series of price cuts have been introduced this year.

“This tariff might seem appealing in light of the past year’s wholesale price drops, however, Market Tracker customers will spend the first quarter on British Gas’ standard tariff - far from their most competitive - and will then either drop, or increase, from there after the first review.

“Customers wanting to make the biggest savings on their energy bills - without the risk of market fluctuation - should switch supplier, go on to a paperless, online tariff and make sure that they pay by direct debit,” he advised.

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