British Gas set to hike power prices
BRITISH GAS is set to hit millions of families with a rise in energy prices that could add £100 a year to household bills.
The country’s biggest power supplier is preparing to reveal as early as tomorrow that it is putting up its gas and electricity tariffs to record levels, there the Standard has learned.
Its rise is expected to be in “high single digits” — close to the nine per cent increase from rival Scottish & Southern Energy that comes into force on Monday.
The average British Gas dual fuel bill for gas and electricity now stands at £1, discount 260. A five per cent rise would add £63, while an eight per cent increase would put on £100. The new higher prices are expected to kick in next month.
The supplier, which has about 16?million domestic customers, will say it is forced into the move by rising wholesale energy and other costs. However, consumer groups insisted its huge profits mean it could easily afford to delay the rise.
Parent company Centrica’s first-half profit was up 15 per cent to £1.45?billion. That included £345?million, a 23 per cent rise, from supplying power and heating to homes.
The planned move will raise new fears for the growing number of Britons in fuel poverty — those who spend more than 10 per cent of their income on gas and electricity.
Ann Robinson, director of consumer policy at uSwitch, said: “This announcement will send consumers reeling. It is the death knell for any hope that suppliers would hold off from price rises until after winter. Consumers will be bitterly disappointed. The pressure of an extra £100 or so on energy bills will leave many buckling and forced to face another winter when they are scared to turn on heating for fear of cost.”
Last year, when all the big six power suppliers increased their prices, eight in 10 British households rationed their energy use because of cost worries.
Shadow energy secretary Caroline Flint said: “People will not understand why British Gas are putting up prices after their interim financial report showed profits on UK residential customers up 23 per cent compared with the same period last year.”
British Gas warned as early as May that bills would have to go up. From Monday average dual bills for the five million customers of Britain’s second-biggest energy company SSE, which operates in London as Southern Electric, will hit £1,354 a year.
Other big suppliers — including EdF, Scottish Power and NPower — are now expected to announce higher prices. E.ON, the only supplier to guarantee a price freeze for 2012, this week refused to extend this commitment into 2013.
All suppliers cut their prices slightly at the start of the year, with British Gas lowering its electricity tariff by five per cent. Although wholesale energy costs have remained well below their peaks this year, the prices which British Gas has had to pay for gas in advance of the winter are about 15 per cent higher than last year.
Energy Secretary Ed Davey said: “The fact is that no government can control world energy prices — but we are acting to help people cut the size of the bills they actually pay.
“That’s why we encourage people to switch to better deals and we are looking at new ways to make that easier, like group purchase.
“It’s also why we want to help people take advantage of insulation offers, so their homes are warmer for less, and why we have special help with energy bills for those most in need.”
British Gas said: “We do not comment on future pricing decisions.”
National Right 2 Fuel Chairman comments:
We are facing an energy bill crisis. Five of the big six energy companies are set to raise their prices by between 5% and 10%, while everything (food, fuel, household bills) is rising except wages.
NRFC member, National Energy Action, estimates that this will mean that more than one in four households in the UK will be unable to afford to heat and power their homes. And Age UK, has told us already that, with the average annual dual fuel bill at more than £1,300, many elderly people in the UK are feeling” extremely anxious” about their energy bills.
It is worrying then that prices are set to rise again at the start of a winter which many scientists predict will be one of the coldest and dampest for a generation due to the melting ice sheets in the Arctic. Cold and poorly lit homes pose a serious health risk to people of all ages, and already the UK has one of the highest levels of excess winter mortality in Europe, more than Poland or Sweden.
Our solution at the NRFC is simple. There is no escaping the fact that countries like China and India want more energy, and that this means that we have to pay more. The more we use the more we pay, so the Government needs to help us to be able to use less.
To do this The Coalition Government needs to follow the advice of their own financial advisers and invest some public money to revive private sector interest in their Green Deal energy efficiency programme. Naturally, the Chancellor, George Osbourne, will be worried about this increasing the UK’s debt. But NRFC campaign partner, the Energy Bill Revolution, has come up with the answer — the Treasury can use the money that we will pay next year through our carbon taxes, to help make our homes super-energy efficient and much cheaper to run.