Published: Wed, August 02, 2017
Finance | By Laverne Griffith

British gas hikes up electricity prices

British gas hikes up electricity prices

The owner of British gas, Centrica, has admitted that more than three million utilities customers will be affected by this energy price hike.

Underlying operating profits from its United Kingdom home energy supply arm tumbled 26% to £381 million as the group said it was also hit by warmer than normal temperatures and the pre-payment tariff cap.

The moves after comes after similar announcements from the other firms making up the big six energy suppliers - EDF Energy, SSE, E.On, nPower and Scottish Power.

"British Gas hasn't had a price rise for almost four years".

Centrica shares were up 2.9% on Tuesday morning at 204.10 pence.

British Gas's standard variable tariff for electricity is now the cheapest of all Big Six offers - however, according to consumer website Uswitch, it is still £286 more expensive compared to the rest of the market.

The heavy-weight hits dragged the group's pre-tax profits down to £81m for the first half of this year, a precipitous fall from £1.6bn a year earlier.

Co-founder Will Hodson said: "British Gas announcing a price rise as they make half a billion in profit is the ultimate slap in the face for families".

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"We have made further significant strategic progress, continuing to reallocate resources away from our asset businesses towards our customer-facing businesses".

Centrica's release on Tuesday gave a bit more detail of the reason for the rise in electricity prices, saying: "The price rise reflects increasing delivery and environmental and social policy costs since 2014, and also the growing additional costs related to the United Kingdom smart meter rollout".

FURIOUS Ministers are insisting "nothing had been ruled out" on capping energy bills today as British Gas blamed THEM for a price hike.

"We're actually proposing that the Government are even bolder and instead of capping standard variable tariff, they should reform it so that it's removed altogether so that contracts that don't have any end are actually phased out and that the level playing field is created so that all suppliers pay the Government's costs", Mr Conn said.

The company achieved £124mln of cost savings during the period and said it remains on track to deliver £250mln in fiscal year 2017. As these costs increase, large firms argue, that creates a market distortion. The average household bill on its dual fuel tariff is forecast to rise by about GBP76 per year to GBP1,120, up 7.3%.

The increase in the price of electricity is the first since November 2013.

An incomplete statement briefly appeared on the website at noon yesterday promising to explain why it has had to raise electricity prices.

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