Can British Gas justify 7% price increases?
Looks like we’re in for a long, cold and skint winter. Energy price increases are back with a vengeance – and today’s unwelcome news from British Gas will hit eight million of its customers.
It was back in July that we discussed whisperings of possible energy price rises here on Which? Convo.
Sadly, British Gas (BG) has now made those rumours a reality, joining Scottish and Southern Energy (SSE) in raising its standard prices.
SSE is increasing its gas prices by 9% from 1 December, while BG will raise gas and electricity prices by 7%. That means eight million BG customers on a standard or variable dual fuel tariff will face (on average) an extra £1.50 a week on their bills from 10 December – equivalent to an extra £78 a year.
Winter energy woes
These are the first standard price increases from the so-called ‘big six’ energy companies to hit existing customers for two years.
The company admits that rising energy prices will ‘come at a difficult time for many in Britain’ – jolly nice of them to remember. So why the increase? It’s putting the blame on a 25% rise in wholesale gas prices as well as rising ‘network charges and environmental obligations’.
Hmm, that will be little comfort for people already concerned about energy costs. As Which? Switch found, around half of Brits are worried about how they’ll afford their fuel bill over the colder months – and that was back in October before any price increases had even been announced.
There’s a bit of relief for the 300,000 low income customers on BG’s ‘Essentials’ tariff – the new prices won’t affect them until April 2011. Anyone on a fixed price tariff is also safe from the price rises, until those deals come to an end.
What can BG and SSE customers do?
Your best bet is to switch to the cheapest available tariff. But considering it takes an average of five weeks to switch energy suppliers, customers will need to act sooner rather than later to avoid a winter’s worth of higher rates.
We’re yet to hear what Eon, npower and Scottish Power has in store for their prices, while EDF Energy has committed to freeze its standard gas and electricity rates until March 2011.
Above all, remember that as a general rule of thumb, if you’re on a ‘standard’ tariff and/or don’t pay your bills by direct debit, there’s probably a cheaper option out there for you. The question remains, will higher prices force you to switch?
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