Up to 3.5million British Gas customers will be hit by ANOTHER price hike as energy firm raises standard variable tariff by an average of £44 a year
- British Gas to raise cost of standard variable tariff by 3.8% from October 1
- Price of average bill for 3.5million households will go up to £1,205 annually
- Firm said its wholesale energy costs had risen by 20% since April
- Comes after it already increased the tariff by £60 per year in May
- Owner Centrica has raised prices to cover costs of smart meter installation
British Gas is raising costs again after hiking its standard variable tariff by 3.8 per cent from October 1.
The increase to the tariff, which was withdrawn for all new customers on March 31, means the average bill for existing dual fuel households will rise by £44 to £1,205.
British Gas said it was increasing its prices following a 20 per cent rise in the costs of buying wholesale energy since April.
The company said 3.5 million customers were affected by the increase, but added it would be contacting them to consider alternatives to the standard variable tariff and expected that figure to drop to three million by the end of the year.
British Gas has raised its standard variable tariff by 3.8%, roughly £44 per year, after claiming its energy costs have gone up by 20% since April
Mark Hodges, chief executive of Centrica Consumer, said: ‘We have today reluctantly announced plans for an increase in our standard variable tariff (SVT). We understand that any price increase adds extra pressure on customers’ household bills. However, this reflects the sharp rise in wholesale energy costs.
‘In response to rapidly rising wholesale market costs, since April a number of other energy supply companies have increased their SVT prices and Ofgem have also announced a second increase to the prepayment meter cap.
‘With more than 70 energy supply businesses now operating in the UK, the energy market is increasingly competitive and we are focused on offering all our customers attractive fixed and bundled deals.
‘As well as providing more choice, we are striving to improve customer service levels, reducing our own costs and rewarding customers. Our British Gas Rewards programme now has more than one million members taking advantage of offers which reward loyalty and encourages engagement.’
It comes as the firm’s owner Centrica is spending £300million a year installing controversial smart meters in homes across the UK. It has completed more than 6million so far.
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The big suppliers are paying for the installations by passing on the cost to customers.
Centrica’s costs currently work out at the equivalent of £40 per bill, although the firm has not said how much of that is being passed on to consumers or absorbed by the company.
In May it increased its standard variable tariff – raising the average dual fuel bill by £60 to £1,161 per year – blaming policies including smart meters as well as rising wholesale prices.
Smart meters allow homeowners to monitor their energy usage and are supposed to help cut costs but they have been beset by problems, including failing to work if customers switch suppliers.
It has recently emerged they might save households only £11 a year, instead of the £26 originally intended. Customers have also expressed privacy concerns.
The tariff was previously hiked in May to help cover the cost of the installation of controversial smart meters in homes (file picture)
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