British Gas will next month ramp up the price of electricity, affecting over a third of its 8.4 million customers.
In a statement on Tuesday, the company, which is owned by Centrica, said that the standard electricity tariff will go up by 12.5 per cent from 15 September. For a typical household on dual fuel, that means that the average annual bill will increase by 7.3 per cent or £76.
Chief executive Mark Hodges said that British Gas had last raised prices in November 2013. Since then, some costs have risen steadily, including “Government policies to subsidise renewable energy, social levies, delivery to customers’ homes, and the nationwide smart metering programme”.
He said that over that period, overall electricity costs have increased by 16 per cent.
British Gas’ move follows a string of similar announcements earlier this year from EDF Energy, SSE, E.On, nPower and Scottish Power and Martin Lewis of price comparison website MoneySavingExpert.com labelled it a “catch-up price hike”.
“[British Gas] was the only one of the big six firms not to raise prices at the start of the year, and now, as predicted, it’ll do it from September,” he said.
“While this freeze has given people a little respite from price moves over the key high-use winter period, the problem is, for many the false sense of security that it wouldn’t move prices meant they did nothing, when they could’ve cut their rate and locked that in for longer by actively picking a far cheaper one-year fixed energy tariff,” he added.
Hannah Maundrell, editor in chief of money.co.uk, echoed his remarks.
“Customers who waited to switch may now have missed out on some of the cheaper tariffs that were available back then and could end up paying more,” she said.
Peter Earl, head of energy at comparethemarket.com, said that Tuesday’s move demonstrates that “the big loser is, once again, the hard-pressed British consumer”.
“Loyalty in the energy market does not pay. It is an indication of a dysfunctional market that savvy customers willing to take action can save over £290 simply by switching provider,” he said.
Ahead of June’s general election Theresa May pledged to introduce price controls on energy bills but last month Business Secretary Greg Clark confirmed that only 2.6 million poorer families who qualify for the so-called Warm Home Discount would be helped – not the 17 million promised on the campaign trail.
Separately on Tuesday, Centrica reported a 4 per cent year-on-year fall in adjusted operating profit to £816m and announced that it had lost 485,000 customers since May.
Those customer losses come on top of 261,000 who left between January and May, bringing total customer losses this year to 746,000.
