British Gas bills to rise by 15%

18 January 2008

British Gas has confirmed that it is putting up the cost of its gas and electricity by 15%.

The energy provider, which has a market share of around 49%, warned its customers before Christmas that prices would go up because of the rising cost of wholesale energy.

It is also expecting a 7% rise in distribution costs in 2008. It says that unless it introduces higher prices to customers these costs, as well as the additional burden of the government’s environmental targets, mean it could be in danger of making a loss in 2008.

British Gas' price hike follows increases by both npower and EDF Energy.

The provider has around 17 million customers, but the price increase will not apply to 340,000 which are on its social tariff, Essentials, until spring 2008 or its 2.4 million customers on fixed term products.

Phil Bentley, managing director of British Gas, says even after the increases the average customer’s bill will be 6% cheaper than in 2006.

He adds: “As the UK's biggest buyer of gas, we want lower gas prices.

“However, lower availability of supplies from both the UK and the Continent coupled with higher global oil prices have forced up wholesale prices.

“We can't absorb the burden of these higher energy prices and the costs of delivering a cleaner environment.”

To help offset the higher cost of energy to customers, British Gas is introducing a free insulation programme to new customers over 70 years old.

Avoid rising energy costs

According to, wholesale electricity prices are at an all time high while wholesale gas prices are likely to remain at 15.5% more expensive throughout this year than in 2007.

So what can you do to beat rising energy costs?

If your bills have risen then the first thing to do is see if you could get a better deal somewhere else. According to, consumers could save up to £325 on their annual electricity and gas bills by choosing a different supplier.

There are several websites that enable you to compare prices, including, and

Joe Malinowski, founder of, recommends households anxious to escape rising energy bills opt for capped deal with price protection features.

Or by choosing a fixed product you can ensure your bills remain at a set price for a certain amount of time.

But before you switch make sure you check if you will face any fees or charges for doing so.

Also, consider opting for dual fuel deals, which cover both gas and electricity, as these tend to be the cheapest.

And if you pay by direct debit you can avoid any additional levies.

Fuel-poor customers

Rising energy bills are particularly hard for so-called “fuel-poor” households. But if you spend more than 10% of your income on energy bills, are a pensioner or have a disability or long-term illness then you might qualify for assistance from your provider. Check with your provider's customer services team to see what help they could offer you.

Finally, making energy efficient improvements to your home such as cavity wall insulation could also protect you from higher bills – although you will need to have some cash upfront to invest in these measures.

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