British Gas to raise electricity prices
British Gas will increase electricity prices by 12.5% from 15 September, its owner Centrica has said, in a move that will affect 3.1 million customers.
However, the company’s gas prices will be held at their current level.
The average annual dual-fuel bill for a typical household on a standard tariff will rise by £76 to £1,120, up by 7.3%.
Centrica said the price increase was its first since November 2013, adding that British Gas was one of the last suppliers to raise prices.
The company added that it would protect its most “vulnerable customers” against the rise and that British Gas would credit more than 200,000 people on the government’s Warm Home Discount with £76.
Centrica chief executive Iain Conn told the BBC’s Today programme that wholesale costs had gone down and were not the reason for the price rise.
“We have seen our wholesale costs fall by about £36 on the typical bill since the beginning of 2014 and that is not the driver. It is transmission and distribution of electricity to the home and government policy costs that are driving our price increase.”
He added: “We are selling electricity at a loss and that is not sustainable.”
British Gas had frozen its gas and electricity prices for six months in February, saying at the time it was able to do so by cutting costs to offset higher wholesale prices.
Centrica Consumer chief executive Mark Hodges 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.
“We are fully engaged in the debate over how to ensure the energy market works better for customers and have made a number of proposals to the government and Ofgem.
“These include phasing out the standard variable tariff and levelling the playing field so all suppliers pay a share of energy policy obligations. We also welcome and share Ofgem’s focus on vulnerable customers.”
The company added that 5.3 million of its customers would be unaffected by the rise.