British Gas hikes energy prices

Millions of households will see their utility bills break the £100 a month barrier after British Gas today announced price hikes of up to 24%.

Some nine million customers will be hit when the supplier raises gas and electricity prices by an average of 18% and 16% respectively from August 18.



The average dual fuel bill will rise by £190 a year to £1,219, pushing the average monthly bill to £101.58p, piling pressure on already-squeezed household incomes.



Last month, Scottish Power announced a similar hike in bills and the rest of the 'big six' suppliers are expected to follow suit in coming weeks.



Today's move intensified calls for a review of the energy market and will leave more households facing the choice between heating or eating.



British Gas said the hike was in response to a 30% increase in wholesale prices since last winter, claiming it was currently selling energy at a loss.



But Mike O'Connor, chief executive of Consumer Focus, said wholesale prices are still a third lower than their peak in 2008 yet British Gas had hiked gas and electricity prices by around 44% and 21% respectively in that period.



He added: "This price rise will send a shock wave across the country. The impact on customers will be severe, piling more pressure on severely stretched household budgets and pushing hundreds of thousands more households into fuel poverty."



Consumer Focus has called for a review of the energy market, including an end to complex tariffs and increased transparency to allow regulator Ofgem to judge whether bills are fair.



Ofgem recently called for the industry to be overhauled after it found that the 'big six' companies had put up prices more quickly than they reduced them when costs fell. It accused them of "failing to play it straight" with consumers and threatened to refer them to the Competition Commission if they failed to simplify prices.



British Gas last raised its bills by an average of 7% in December, adding £1.50 to the average weekly dual fuel bill.



The most recent rise means that some bills will increase by as much as 24% depending on how customers pay and where they live. The minimum increase will be 12%.



Managing director Phil Bentley, said: "We know there is never a good time to raise prices but we are buying in a global energy market and have to pay the market rate."



But he advised customers to wait and see what happens in the energy market before switching supplier in a clear hint that he expected price hikes across the board.



British Gas, which serves nearly half of households in the UK, announced the hike during a press conference held by Prime Minister David Cameron about the News of the World phone-hacking scandal.



The company offered numerous ways for customers to keep their bills down, including fixing their rate, improving insulation in their homes and providing energy monitors.



Richard Lloyd, executive director of consumer campaigner Which?, said: "Many people are already having to cut back on essentials because of the rising cost of living, and with energy bills rising further, this could be a cold winter for many."



Meanwhile, energy and climate change secretary Chris Huhne said Britain needs to invest in alternative forms of energy to make it less reliant on the fluctuating prices of fossil fuels.



He added: "Only radical reform now will give us the best chance in the long run of keeping the lights on at a price that doesn't wreck our economy over and over again."

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

Day In a Page

The long walk west: they fled war in Syria, only to get held up in Hungary – now hundreds of refugees have set off on foot for Austria

They fled war in Syria...

...only to get stuck and sidetracked in Hungary
From The Prisoner to Mad Men, elaborate title sequences are one of the keys to a great TV series

Title sequences: From The Prisoner to Mad Men

Elaborate title sequences are one of the keys to a great TV series. But why does the art form have such a chequered history?
Giorgio Armani Beauty's fabric-inspired foundations: Get back to basics this autumn

Giorgio Armani Beauty's foundations

Sumptuous fabrics meet luscious cosmetics for this elegant look
From stowaways to Operation Stack: Life in a transcontinental lorry cab

Life from the inside of a trucker's cab

From stowaways to Operation Stack, it's a challenging time to be a trucker heading to and from the Continent
Kelis interview: The songwriter and sauce-maker on cooking for Pharrell and crying over potatoes

Kelis interview

The singer and sauce-maker on cooking for Pharrell
Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea