British Gas hikes prices by over 10%

Hob and coin

British Gas (BG) is to raise its prices by an average 9.2% - three times the rate of inflation - heaping further misery on cash-strapped households.

The rises, which include an increase of 8.4% for gas and 10.4% for electricity, will affect 7.8 million customers and be introduced on 23 November. The average customer's annual dual fuel bill will rise by £107 to £1,297.

The government expressed its disappointment at the announcement and said the figures used by British Gas to justify its price rises "don't add up".

Ian Peters, managing director of British Gas Residential Energy, said: "We haven't taken this decision lightly, but what's pushing up energy prices at the moment are costs that are not all directly under our control, such as the global price of energy, charges that we have to pay for using the national grid that delivers energy to the home, and the cost of the government's social and environmental programmes.

But the government's energy secretary, Edward Davey, accused BG of not being transparent when calculating the rise in prices. He said: "This is extremely disappointing news for British Gas's customers, and the company will need to justify this decision openly and transparently.

"I recently wrote to energy companies asking them to publish their costs of delivering the Energy Company Obligation (ECO). Today's announcement shows why that's necessary, because British Gas's ECO numbers just don't add up when you look at what other energy companies are saying about their costs."

BG is the second energy supplier to raise prices after SSE's announcement on 10 October that its customers will pay 8.2% more for their gas and electricity from 15 November.

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Energy experts reacted with disappointment to the announcement - and warned that further rises are to come from the remaining Big Six energy groups.

Bitter pill

Clare Francis of said: "It was only a matter of time before British Gas dealt the blow to its customers and announced price increases. The UK's biggest energy company had warned that prices would have to rise but the news will be a bitter pill for them to swallow.

"And it won't stop there. We can expect the other four major providers - EDF, e.on, npower and Scottish Power - to also announce price hikes over the coming weeks."