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British Gas Announces Price Hikes
British Gas become the latest of the Big Six suppliers to announce electricity price rises
British Gas has announced it will be increasing the price of its standard variable tariff (SVT) for electricity. Although gas prices remain unchanged, dual-fuel bills will go up by 12.5%, which equates to £76 a year, and an estimated 3.1 million customers are to be hit.
The supplier has pledged to protect vulnerable customers by ensuring that those entitled the government’s Warm Home Discount, more than 200,000 people**, have the £76 credited to them.
The move follows price rise announcements by the other five suppliers that make up the Big Six, earlier this year.
Table 1: Major energy suppliers’ price rises in 2017
|Supplier||Previous SVT price||New SVT price||Difference||Comes into effect from|
|British Gas||£1,044||£1,120||£76 7.3%||15 September|
|EDF Energy||£1,069||£1,160||£91 8.5%||11 February and 21 June|
|Npower||£1,077||£1,187||£109 9.8%||16 March|
|ScottishPower||£1,081||£1,167||£86 7.8%||31 March|
|E.ON||£1,057||£1,144||£87 8.8%||26 April|
|SSE||£1,056||£1,129||£73 6.9%||28 April|
Source: uSwitch.com. Correct as of 1 August 2017
While the British Gas tariff will still be the cheapest of the Big Six SVT’s, it’s still at least £280 more expensive than the cheapest tariff currently available on the market.
Centrica, parent company of British Gas, have attributed the hikes to increased transmission and government policy costs. It stated that the cost of distributing electricity to homes is also going up. Though wholesale prices have generally been on the decline since the beginning of 2017, Centrica added:
"We are selling electricity at a loss and that is not sustainable."
The government has been critical and don’t believe policy costs justify the increases. The shadow energy minister has dubbed it a “whopping rise” and referring to the talk of a price cap announced by the PM earlier this year, believes the government need to step in.*
British Gas originally froze prices for six months, back in February so it is the last supplier to hike. Prior to that, the last increase of its electricity prices was back in November 2013. MoneySavingExpert Martin Lewis believes it could prompt yet another round of increases from the rest of the Big Six going into winter.*
Price rises for business customers could follow suit.
Make It Cheaper’s Commercial Director, Jennifer Millet surmises:
“This latest set of price hikes are yet another blow to consumers. British Gas have followed the rest of the Big Six by increasing its standard variable tariff, and it’s the UK’s households that will be worse off. The best thing to do now is to switch supplier and avoid paying over the odds for energy, especially as we enter the winter months. Many could find themselves out of pocket otherwise. For business owners, we’ve seen prices creeping up. And unfortunately, what we can expect is more of the same for them”
It’s not all doom and gloom. You can take control of your business’s energy costs by ensuring you’re on the best tariff. Call our experts today to get a comparison, and see if you could be saving. Find out more here.