British Gas to raise electricity prices by 12.5% in September

British Gas to raise electricity prices by 12.5% in September

Even though it plans to close it, Centrica wants to produce all recoverable gas from the Rough field, which is estimated at 183 bcf, a process which would take years. If we assume that rate of increase was the same 2.9% a year from 2014 to 2017 that would have added no more than £10 to a bill, so we're still £79 short.

Iain Conn, the chief executive of Centrica, told BBC Radio 4's Today programme that while the commodity price of electricity had come down, it was facing "significant cost pressure" on transmission and distribution, as well as costs associated with Government policy.

Mr Conn hit back saying: "Governments have had to make some very hard decisions about the future of the energy system and the way in which we now pay for that is through the bill".

British Gas have announced a hike in prices, prompting fears that other rivals will follow suit and potentially leave consumers hit in the pocket this winter.

Centrica took a 224-million pound post-tax impairment charge in the first half of this year related to the Rough field.

The British Gas standard tariff now costs an average of £1,044 a year, but after the hike it will mean a typical household will pay £1,120 a year.

"These include phasing out the standard variable tariff and levelling the playing field so all suppliers pay a share of energy policy obligations". If we attribute £9 of that to the increased costs of getting electricity to people's homes then that leaves £89.

The price hike will leave 3.1 million households forced to fork out more for monthly bills.

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Former Lib Dem leader Tim Farron said: "This is a colossal increase that will really hurt customers already struggling with rising prices due to the deteriorating economic situation".

The company owned by energy giant Centrica said the price rise was its first for four years and that it would give a £76 credit to more than 200,000 vulnerable customers to protect them from the increase.

Stephen Murray, energy expert, MoneySuperMarket added: "This announcement from British Gas must be one of the worst kept secrets in the history of the energy industry".

But the move flies in the face of the government, which made a pre-election pledge to introduce a price cap, although that has since been watered down.

Theresa May attacked Npower's planned 15% price hike as "shocking" earlier this year and announced plans for an energy price cap in May.

We have announced today that because we are anxious about vulnerable customers this winter that an additional 200,000 customers who get a wrap home discount will be protected from the price rise.

"And that means if, as is possible, we see another batch of rises this coming winter, its customers will feel like they've been price-slapped twice in rapid succession".

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