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BRITISH GAS TURNS UP THE HEAT
SENIOR sources at British Gas have this week revealed that
the company is set to announce the biggest gas and electricity price
increases in British history. The massive 25% increase, which is 10
times the annual rate of inflation, will find 11 million British Gas
customers paying a staggering £209 extra per year, taking the
average household energy bill up to £1030. Despite already being on
average 12.5% more expensive for gas than its competitors, this
figure is set to rise.
British Gas is blaming the rises on increases in the cost of
wholesale gas, in spite of the fact that it buys the bulk of its
gas on long-term contracts. This means that the company should have
been insulated from the recent dramatic short-term movements in the
wholesale gas market.
Ann Robinson, Director of Consumer Policy at leading switching and
comparison service uSwitch.com comments:- “We have been
expecting an increase from British Gas, but frankly these figures
are shocking. There is insufficient justification for such excessive
price rises. We will be looking to Ofgem to step in and investigate
the reasons for these increases, and verify that they are
legitimate. This is a dramatic response to the recent
volatility within the wholesale gas market, which is likely to
subside in the near future. The fact is that British Gas will have
increased its prices by 43% in the space of just five months, and is
banking on customer apathy to keep its balance sheet looking
healthy.
Customers now need to vote with their feet and let British Gas know
that this is one price rise too many. If enough people switch away
this time it might make the company think twice before introducing
increases of this magnitude in the future.”
The highest winter death toll in 5 years was reported in 20059, and
there is a real fear that more people will die as they struggle to
keep warm this winter. The poorest 6 million people in the UK are
already on the verge of fuel poverty, spending 9% of their income on
energy bills. Worryingly, this 25% price increase will add 422,000
households to the 3 million already living in fuel poverty in the
UK. This makes meeting Government targets to eradicate fuel poverty
by 2016 highly improbable.
Ann Robinson continues:- “Too little too late is being done
for these people. There are around 1.9 million vulnerable customers
in the UK, 800,000 pensioners are already living below the poverty
line, and we estimate that almost half a million households will be
pushed into fuel poverty as a result of these rises. Those people
who are paying over 10% of their income towards energy bills are now
in serious danger, and need a record increase like a hole in the
head. This issue is compounded by the large numbers of people
who are either not entitled to, or not claiming the benefits
available. 50% of people that are in fuel poverty do not qualify for
the Winter Fuel Allowance, and only 1 in 3 pensioners claim the free
benefits that they are entitled to. The percentage of a pensioner’s
typical bill covered by the Winter Fuel Allowance will have fallen
from 53% in 2003 to 31% once these price rises come into effect.
Energy suppliers, along with the Government, have a duty to provide
better information and greater financial support to those that need
it most.”
For more information
visit uSwitch.com or call 0800 093 06 07
Karen Darby, CEO from SimplySwitch.com comments:- “British Gas
is set to inflict its biggest ever price rise on its 11 million
customers. As prices are already at an all time high, a further
increase will hit many households hard and push an average annual
household energy bill well above the £1,000 mark. As wholesale
prices remain volatile, we have been expecting energy companies to
announce further price increases and if British Gas puts its prices
up, others will follow. These price rises will have a
significant impact on consumers’ bills, but the providers are
relying on customer apathy - consumers have the option to switch to
a better deal. Last month, British Gas dropped its 2010 price
protection tariff for new customers at a time when demand for capped
and fixed products is at its peak. There are other capped and fixed
options available and I would urge all consumers to sign up to one
before they are withdrawn. Since the start of 2004, gas prices
have gone up by an average of 32% while electricity prices have gone
up by an average of 24%. British Gas last increased its prices in
September 2005 when they went up by 14.2% for both gas and
electricity, adding £48.00 to an average annual bill."
Capped and fixed price tariffs
EDF Energy
* Prices are frozen until January 2008 - Prices will not alter up or
down * Available for any customers of London Energy, Seeboard Energy and
SWEB Energy * This offer is available to standard and economy 7 electricity and
dual fuel customers and is open until the end of the year
* No exit penalties if you switch away
* Unit rate is +approximately 5% for dual fuel when compared with
the standard tariff
Powergen
* Capped until October 2007 - Prices can decrease if wholesale
prices fall * No end date for sign up. Available across the UK.
* Dual fuel only
* No exit penalties if you switch away
* Payment methods available: Monthly direct debit or quarterly cash
cheque * Capped rate will be reviewed if wholesale prices drop
* Unit rate is +12% for dual fuel when compared with the standard
tariff
Scottish Power
* Frozen until October 2007 - Prices will neither alter up or down
* Available to dual fuel customers or electricity only - Not
available on single gas
* Cash/ Cheque or monthly Direct Debit payment options available.
* No exit penalty
* An extra £2.50 per month is paid on gas & an extra £1.50 on
electricity compared to their standard rate.
npower * Gas prices capped until January 2007
* A limited offer, though no end date for sign up as yet
* Available across the UK
* Available for dual fuel and single gas
* No exit penalties if you switch away
* Payment methods available:- Monthly direct debit or quarterly cash
cheque |
