British Gas customers facing higher bills

14 December 2007

British Gas customers could be facing a hike in their energy bills next year if wholesale gas prices remain high.

The parent of the energy giant, Centrica, has told investors that although it is still making a profit “challenging” market conditions have resulted in a reduction of profit margins. It also hinted that if the wholesale cost of gas remains high, then British Gas might to forced to increase its prices.

That would mean higher energy bills for British Gas’ 16 million customers. And high wholesale gas prices could mean other gas providers are forced to follow its lead.

Centrica says: "The high wholesale prices will, if sustained, create a more difficult environment for retail energy suppliers in the UK going into 2008.

“We will continue to monitor this with regard to future pricing policy.”

Analysts are now predicting energy price hikes of 15% in early 2008, which could increase many customers' bills by £131 a year, according to SimplySwitch.

Karen Darby, a spokeswoman for SimplySwitch, says: “Historically, when one of the big suppliers increases prices, the others are quick to follow. With petrol prices rising, the cost of mortgages still high and the inevitable financial hang-over from Christmas, householders will really feel the pinch early in the New Year."

Tim Wolfenden, head of home services at, says: “Although Centrica predicts a more difficult environment for all retail energy suppliers in 2008, it is still making a profit, but is saying that it isn’t enough.

“Wholesale prices are squeezing its profits and to ensure it maintains high target margins, it will have no choice but to pass on increased wholesale costs to customers."


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