British Gas Price Rise Fury

January 25th, 2008 — News

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British Gas is putting prices up by 15% or £85 for gas and 15% or £54 for electricity. The price hike comes into effect immediately and will hit standard tariffs, potentially affecting over half its 16 million customer accounts and adding an extra £139 on to the average dual fuel customer’s household energy bill. Bills are now set to rise from £912 to £1,051.

The move comes despite British Gas reporting record half year profits of £533 million - almost £3 million a day and up by £676 million year-on-year – off the back of lower wholesale prices. According to Citigroup, British Gas’ projected 2007 year end profits are set to hit almost £639 million – more than six times the £95 million British Gas made in 2006. The projections suggest that, for residential supply alone, the giant will see its profit per customer increase fivefold from £5.93 to £39.92.

For British Gas customers it means further pricing misery after enduring a three year run of price increases when dual fuel bills rocketed by 85% or £513 (2004 – 2006). This came to an end last year when British Gas dropped prices by 19% or £208. Today’s move shifts British Gas back into its old position as Britain’s most expensive gas supplier.

  • British Gas prices going up by 15% or £85 for gas and 15% or £54 for electricity
  • Average household bill for a dual fuel British Gas customer will go up from £912 to £1,051 – only £64 cheaper than when prices were at an all time high
  • Gas customers will suffer most, as British Gas will now be the most expensive supplier for gas – gas bills will go up from £568 to £653 a year
  • Increases are on standard tariffs – over half its 16 million customer accounts will be affected
  • British Gas reported record half year profits of £533 million, but Citigroup predicts that year end profits will hit almost £639 million – more than six times the £95 million it made in 2006
  • Average British Gas dual fuel bill rocketed by 85% or £513 (2004 – 2006) but only fell by 19% or £208 last year

    • However, customers are being warned to expect further price blows as British Gas recently indicated that it is considering regional pricing for gas – a ‘postcode lottery’ policy which will see consumers paying different prices for gas based on where they live in the UK.

    If British Gas does introduce regional pricing for gas, other suppliers are likely to follow suit - some consumers can expect to pay close to £100 more for their energy compared with others living elsewhere in the country.

    Ann Robinson, Director of Consumer Policy at uSwitch.com, comments: “Today’s increase is the thin end of a wedge – British Gas has left the door open for a change in pricing policy that will see consumers paying different prices for gas based on where they live in the UK. If this ‘postcode lottery’ policy is adopted across the board by all suppliers then previous estimates that price rises would add an extra 15% or £150 onto household bills in 2008 could fall short.”

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