British Gas has today announced that it will be increasing its domestic gas and electricity prices by an average of 18% and 16% respectively.
The price hike follows Scottish Power’s lead, which last month saw the energy provider raise the cost of its gas by 19% and its electricity prices by 10%.
The increase will take effect from 18 August, and will cost the average dual fuel customer around £190 extra a year on their energy bill. British Gas is blaming the rising wholesale cost of gas, which has gone up by 30% since last winter, for the energy increase.
The energy firm admitted some bills could increase by as much as 24% depending on how customers pay their bills and where they live. The minimum increase will be 12%. The price change will directly impact nine million customers, while a further million have fixed prices so will not be immediately affected.
Phil Bentley, the managing director of British Gas, has said its bills were being driven higher by the fact that the company buys 50% of its gas on the international wholesale market.
“We are buying in a global energy market and have to pay the market rate,” he said. “Rising wholesale costs is an issue facing all energy suppliers.”
Centrica – which owns British Gas – has been warning customers that a price increase was inevitable. So the news, although unwelcome, will come as no surprise.