British Gas hits 3.1 million customers with 12.5% electricity price hike

The price rise will affect 3.1 million customers

BRITISH GAS has announced it is to hike its electricity tariffs by 12.5% in September in a move affecting 3.1 million customers.

The Big Six energy giant confirmed the price rise, which will take effect on September 15, after a blunder on Monday saw the group mistakenly publish an incomplete statement about increasing electricity tariffs on its website.

Centrica-owned British Gas said the price rise is its first since November 2013 and the group pledged to help protect more than 200,000 vulnerable customers from the increase.

We have announced a 12.5% increase of our electricity price from mid-September. Our gas price will remain unchanged. https://t.co/xlmbNzfzDG

— British Gas News (@BritishGasNews) August 1, 2017

Details of the increase comes as British Gas owner Centrica posted half-year results revealing that earnings from its consumer business plunged by more than a quarter after it lost 377,000 UK customer accounts in the first half.

Underlying operating profits from its UK 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.

Centrica’s overall underlying operating profits were 4% lower at £816 million for the six months to June 30.

The group said it held off from the price rise a for “up to six months longer than some of our competitors”.

'Big Six' suppliers' electricity standard plan price changes — (PA graphic)

The price hike will mean an average dual fuel bill for a typical annual household tariff will rise by £76 to £1,120 – a 7.3% increase, according to British Gas.

The group said it will give more than 200,000 customers receiving a warm home discount a £76 credit to offset the tariff increase.

British Gas is the last of the Big Six providers to increase prices after it promised in December last year to freeze tariffs until August. The group insisted its overall electricity costs had increased by 16% since 2014.

But the move flies in the face of the Government, which made a pre-election pledge to introduce a price cap, although that has since been watered down to cover vulnerable households only.

Today we have released our 2017 Interim Results https://t.co/iN3H7nKsRW

— Centrica plc (@centricaplc) August 1, 2017

Iain Conn, the chief executive of Centrica, told BBC Radio 4’s Today programme that while the commodity price of electricity had come down, it was facing “significant cost pressure” on transmission and distribution, as well as costs associated with Government policy.

He added: “The net effect of both of these is an increase of about £62 on the average bill, and that is the main driver of the increase, combined with the fact that our electricity prices at British Gas have been some of the cheapest in the market, and actually we’re now selling our electricity at a loss, which is clearly not sustainable.”

A spokeswoman for the Department for Business, Energy and Industrial Strategy said: “Energy firms should treat all their customers fairly and we’re concerned this price rise will hit many people already on poor-value tariffs.”

Shadow energy minister Alan Whitehead told Today that Centrica’s plans amounted to a “whopping price increase”, adding that all the Big Six energy companies had now put prices up at a time wholesale prices had come down.

The Labour MP said: “On the face of it, it doesn’t appear to be justifiable at all.”