British Gas to raise prices again for 3.5 million customers
British Gas customers will see a price hike for the second time this year as the UK’s biggest supplier of energy said bills would increase by £44 on average.
Centrica, the owner of British Gas, blamed it on a 20% rise in the cost of buying wholesale gas.
More than three million customers on a standard variable tariff (SVT) will be hit by a 3.8% increase on 1 October, taking the average bill for dual-fuel customers to £1205.
Its 2.4 million customers on fixed-price contracts will be unaffected.
In April, the firm announced its first rise for 2018 – an average 5.5% for SVT customers and those on a temporary tariff fixed-rate deal. “We have today reluctantly announced plans for an increase in our Standard Variable Tariff (SVT),” said Mark Hodges, chief executive of Centrica Consumer.
“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.”
The company said it would contact customers affected to offer alternative deals.
In the first six months of 2018, the energy group lost 1.4 million domestic customer accounts to rivals.
There are more than 70 energy suppliers operating in the UK.
The British Gas increase comes a day after the energy regulator increased its price cap on variable tariffs, as rising oil prices had fed through to wholesale gas prices.
Ofgem said its safeguard tariff, which protects five million households from overcharging, would rise by £47 per year in October to £1,136.
In a statement, Ofgem said: “While we had to increase the level of the safeguard tariff yesterday due to higher wholesale prices, these households are still better off and can be confident that they are protected from unfair price rises.
“The way we set this safeguard tariff is open and transparent. We encourage British Gas to be as transparent with its own customers in explaining why they have chosen to increase customer bills rather than absorbing any extra costs themselves.”
E.ON, SSE, Npower, EDF, ScottishPower and Bulb have all raised prices in recent months.
Consumer groups have encouraged customers to switch suppliers to get a better deal.
Henry de Zoete, co-founder of auto-switching service Look After My Bills, said: “British Gas’s second price rise in the space of just a few months is a disgrace and a slap in the face for families.
“Just a few days ago they announced a profit of £430m despite losing 270,000 customers.”Clearly British Gas’s strategy is to get as much money as possible out of their base of customers before the price cap comes in to force.”
Consumer watchdog Which? has estimated that customers who do not seek out the best deals could end up overpaying by as much as £400 per year.