British Gas said that prices for dual fuel supply will increase by 25% with immediate effect, with a lower price increase of 21% for dual fuel prepayment customers. Prices for electricity will increase by 9% and gas by 35%. The utility said that there will be no increase in prices for 2.1 million customers on fixed price tariffs.
Wholesale gas prices for winter 2008 have been increased by 89% on the previous winter, up from GBP48 per therm to GBP90.8 per therm. Wholesale electricity prices have increased by 72%, up from GBP49.62 per MWh to GBP85.58 per MWh over the same period.
The utility stated that the increase in wholesale prices is the result of diminishing UK gas reserves with the country expecting to import 40% of its gas needs in 2008, up from 27% in 2007. The UK is now buying gas in a global market where prices are linked to record oil prices, which have doubled since spring 2007.
British Gas said that it has also launched the Essentials Extra package of benefits that will allow its most vulnerable customers to control their energy bills on an ongoing basis. Along with benefiting from a delay in the price increase until after winter, customers will be offered a home energy audit to identify measures that can be taken in their homes to cut consumption and bring down the cost of energy when prices rise after winter.
Phil Bentley, British Gas’s managing director, said: We very much regret that we have had to make this decision at a time when many household budgets are already under pressure. The simple fact though, is that we have entered an era of unprecedented high world energy prices. The only answer to cope with higher energy prices, I am afraid, is for all of us to be more energy efficient and we will be contacting all our British Gas customers to show how they can save energy to try and offset these price rises.
