British Gas hikes electricity prices by 12.5%

british gas

Centrica keeps gas bills unchanged but says first electricity rise since 2013 means average annual dual fuel bills will increase by 7.3 per cent to £1,120.

Centrica, the owner of British Gas, has raised electricity prices by 12.5 per cent but left gas prices unchanged, which means annual dual fuel bills will rise by 7.3 per cent to £1,120, reports The Guardian.

The average annual dual fuel bill will go up by £76 from 15 September and affect 3.1m customers, with 5.3m unaffected, Centrica said. It will give a £76 credit to more than 200,000 vulnerable customers to protect them from the increase.

The company said the electricity price hike – the first since November 2013 – reflected the increasing costs of energy and delivery to customers’ homes since 2014. Since then its costs have increased by 16 per cent.

Mark Hodges, head of Centrica Consumer, said: “We held off increasing prices for many months longer than most suppliers in order to protect our customers from rising costs, so it is a difficult decision to have to announce an increase in electricity prices.

“This rise reflects an underlying increase in policy and transmission costs. We know that keeping energy prices as low as possible is vital, and our new standard tariff price has again been set at a level lower than most of the top 10 suppliers. We are able to do this because we have managed our own cost base tightly.”

The news came as Centrica reported an adjusted profit before tax of £639m for the six months to June, down from £688m a year earlier.

Iain Conn, the chief executive, said: “Centrica delivered a solid first half financial performance despite reduced energy demand due to warm weather and strong competitive pressures, and we remain on track to achieve the 2017 targets we set out in February.

Households are missing out on the cheapest tariffs on the market by not switching. Although the number of people switching rose by 30 per cent last year, around two-thirds of billpayers are still on the worst-value standard tariffs. Trials are under way on how to encourage people to switch.