Industry reaction to British Gas price rises
British Gas announced yesterday that it will introduce large increases to the cost of gas and electricity from August.
Typically, domestic customers can expect to see gas prices rise by 18 per cent and electricity prices rise by an average of 16 per cent.
This price rise follows an average increase of seven per cent in gas prices introduced by British Gas in December 2010 and follows the announcement by Scottish Power last month that it will raise prices by an average of 19 per cent for gas customers and ten per cent for electricity bills.
Here is the reaction from the industry to the news.
Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "We are straying into deeply worrying ‘double price hike' territory. It now looks as though households are on track to see their energy bills increase by £182 or 16% this year.
"Last winter over three quarters of people (76%) cut down or rationed their energy use because of cost - a 7% increase on the previous year. In just five years we have seen energy bills snowball from £660 a year to £1,193 following today's announcement."
Scott Byrom, energy channel manager at moneysupermarket.com said:
"British Gas is the next of the Big Six to add to consumer misery with a price increase to the cost of energy bills for its millions of customers.
"A recent moneysupermarket.com survey revealed the biggest financial worry for Brits is the rising cost of household bills, with one in three (36 per cent) citing this as their biggest financial concern.”
Mike O'Connor CBE, Chief Executive of Consumer Focus said:
"This price rise will send a shock wave across the country. The impact on customers will be severe, piling more pressure on severely stretched household budgets and pushing hundreds of thousands more households into fuel poverty.
"Consumers simply don't trust that energy companies have customers' interests at heart and rightly question whether prices are fair. Wholesale costs have gone up but they are still around a third lower than their 2008 peak."
Citizens Advice Chief Executive Gillian Guy said:
"Last year CAB advisers helped with almost 104,000 fuel debt problems. For a lot of people this latest round of price hikes from fuel suppliers will be the final straw that drives them over the edge into serious debt and hardship. We already see cases of self-rationing and self-disconnection where people on low incomes who can't afford rapidly rising gas and electricity bills decide their only option is to go without the heating they need.
"All fuel suppliers need to make it very clear to customers why it is necessary to raise prices by so much now. It's also vital that they always treat vulnerable customers and those in financial difficulties sympathetically and fairly."
Lisa Greenfield, energy analyst at Confised.com said:
"Struggling households will be dismayed by this news, and as British Gas is the largest supplier in the UK, many families will be hit hard. We suggest consumers opt for a fixed tariff as they offer price security against from future hikes. Paying by direct debit and managing your account online will also be a cheaper option."
British Gas Managing Director, Phil Bentley, said:
"We know there is never a good time to raise prices, but we are buying in a global energy market and have to pay the market rate.
"Rising wholesale costs is an issue facing all energy suppliers. Our advice to customers is to wait and see what happens in the energy retail market as a whole before making any decisions about switching supplier.
"In the mean time, they should get in touch with us and ask about the simple ways we're offering to help keep bills under control."
Customers can contact British Gas by calling for free on 0800 048 0202 or by visiting: www.britishgas.co.uk/threesimpleways.
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