British Gas customers to be hit with up to 12.5% price hike

GETTY    
   ENERGY British Gas have announced a significant price hike for this September

The claim: British Gas has been forced to increase prices because of rising distribution costs and government policy.

British Gas owner Centrica accidentally leaked the plans on its own website on Monday evening.

BG is the latest supplier to announce their price hike of 12.5% for electricity, meaning an average rise of 7.5% for dual fuel, variable rate customers - effectively adding £235.6 million to its customers' energy bills.

Government sources reiterated Theresa May's threat to hit the industry with price capping if charges kept on being hiked.

"We've held off making an increase for as long as possible, and for many months after other suppliers significantly raised their prices".

Chief executive Ian Conn told the BBC Today programme: "Governments have had to make some very hard decisions about the future of the energy system and the way in which we now pay for that is through the bill". It is giving a £76 credit to 200,000 vulnerable customers to cushion them from the rise and is holding gas prices at their current level.

British Gas will increase its electricity tariffs by 12.5pc in September 2017: Pictured: British Gas engineer.

The result was a severe drop in statutory profit attributable to shareholders in the first half to just GBP44.0 million from GBP1.14 billion the year before - a 96% drop.

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The British Gas standard tariff now costs an average of £1,044 a year, but after the hike it will mean a typical household will pay £1,120 a year.

He said: "We haven't taken this decision lightly. In that time, overall electricity costs have increased by 16%", Centrica added.

And mounting utility bills combined with flatlining household incomes and poor building standards on insulation, mean the problem has been growing steadily in the United Kingdom for years.

"While this freeze has given people a little respite from price moves over the key high use winter period - the problem is for many the false sense of security that it wouldn't move prices meant they did nothing, when they could've cut their rate, and locked that in for longer, by actively picking a far cheaper 1 year fixed energy tariff".

"On the face of it, it does not appear to be justifiable at all from where the market is going", he said.

"The summer months are a time when many people take their eye off their energy bills and there is a danger that millions of British Gas customers will miss this or shrug their shoulders in passive acceptance".

"It is really important now that energy prices are stabilised and we need a cap to do that", he said.

Regulator Ofgem has pledged to deliver a "safeguard tariff" to help Brits pay fairer energy bills. We want to see rapid progress on this commitment and are ruling nothing out.

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