British Gas hikes energy bills by 7%

Around eight million British Gas customers will face higher utility bills from next month as the energy supplier today confirmed a hike in tariffs.

Household bills for gas and electricity will increase by an average of 7% from December 10, which will amount to an increase of £1.50 on the average weekly dual-fuel bill. The increases apply to customers on standard and variable tariffs.



The company said rising wholesale prices had forced it to lift the bills, but vowed not to apply the increase to the company's 300,000 most vulnerable customers, such as the poorest pensioners.



The move follows a price lift by utility giant Scottish & Southern at the end of last month. SSE said it would put up its gas bills by 9% from December 1.



Industry regulator Ofgem recently warned that rising prices in the wholesale market - where suppliers buy their energy - could be passed on to the consumer.



British Gas, which is owned by Centrica, said it had witnessed a rise of more than 25% in wholesale gas prices since the spring.



The utility firm said today's increase followed two years of price cuts, meaning its average dual-fuel bills were still lower than in January 2009.



British Gas managing director Phil Bentley said: "We know that rising energy prices come at a difficult time for many in Britain.



"That's why we are not raising prices for our vulnerable customers, such as the poorest pensioners, until after this winter."



Mr Bentley said customers could keep their bills down by improving the energy efficiency of their homes.



Some 1.6 million customers on fixed price deals will not be affected in any way, British Gas added.









Today's announcement means an average British Gas customer's dual-fuel bill will rise annually to £1,239 from £1,157.



Customers identified as vulnerable will see bills held until April, the firm added.



In addition to a rise in wholesale prices, British Gas said other costs, such as transport and distribution, had increased by 6%.



Mr Bentley said as a result the company had recently been selling gas at a loss, which was "not sustainable".



But lobby group Consumer Focus said wholesale prices were around half their peak in 2008 and in the same period customers' prices have fallen by less than 10%.



Adam Scorer, director of external affairs at Consumer Focus, said: "Consumers will be dismayed by this news. Winter is going to seem that much colder and budgets are going to be that much tighter after this announcement.



"Consumers will feel that suppliers didn't make cuts when conditions allowed it, but are covering their profit margins as wholesale prices nudge up."



British Gas, along with the rest of the industry, will ramp up its spending on infrastructure over the next 10 years to secure supplies to households.



Mr Scorer said the cost of this investment would be recovered from consumer bills, which will continue to rise "dramatically" as a result.



British Gas saw profits nearly double in the first six months of 2010 to £585 million after the coldest winter for 30 years saw customers reach for the thermostat.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Day In a Page

Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor