Markets

British Gas to increase electricity tariffs for millions of customers

British Gas to increase electricity tariffs for millions of customers

British Gas today announced a 12.5 per cent hike in electricity prices from next month in a direct snub to the Government.

Worked at BP for 29 years before stepping down from the board in 2014 to become CEO of British Gas owner Centrica.

It has said gas prices will remain at their current level, but the average annual dual fuel bill for a typical household on standard tariff will rise by £76 to £1120 - an increase of 7.3 per cent.

Such announcements are highly sensitive because they can affect share prices.

"We need to open up the market to more competition to drive down prices and take action to help lower income families". Ofgem says that the costs of government obligations for energy rose 2.9% between January 2016 and January 2017.

British Gas have announced a hike in prices, prompting fears that other rivals will follow suit and potentially leave consumers hit in the pocket this winter.

Centrica plc (CNA.L) reported that its statutory profit attributable to shareholders for the first half of 2017 plunged 96 percent to 44 million pounds from 1.15 billion pounds a year ago.

"When the reporters challenged British Gas' decision to increase electricity costs, Hodges said competition in the gas market is good" and that their customers "have a choice" to select alternative suppliers.

The Department for Business, Energy and Industrial Strategy (BEIS) has condemned the move, expressing "concern" that the price rise "will hit many people already on poor-value tariffs".

It's due to the increase in electricity costs.

Some industry analysts argue that falls in the wholesale price of gas and electricity should see cuts in energy bills rather than increases.

He says there's not been a rise for almost 4 years.

In the run up to the June General Election, the Conservatives promised and energy price cap, in a supposed departure from traditional Tory liberal economics which rejects state interference in the market.

That's bad news for six million British Gas customers and unjustifiable given that British Gas's costs have dropped by 9 per cent since December previous year.

The hike will be introduced in September and will impact 3.1 million people. Instead the plan is to safeguard customers on the poorest value tariffs.

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.

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


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