Over four million British Gas customers on its standard variable tariff (SVT) will be hit with price hikes from 29 May, the Big Six provider has announced.
For a typical dual fuel customer, this means an average increase of 5.5% or £60 a year (£30 for gas and £30 for electricity), taking annual bills to an average of £1,161.
British Gas withdrew its SVT for new customers on 31 March, replacing it with a new 12- month, fixed-term default tariff, called the ‘temporary tariff’.
However, this temporary tariff will also rise in price on 29 May by 5.5% or £60 a year, taking the average annual dual fuel bill to £1,136.
Rising wholesale and policy costs – including the smart meter roll-out scheme – have been blamed for the price rises.
Mark Hodges, chief executive of Centrica Consumer – British Gas’ parent company – says: "We fully understand that any price increase adds extra pressure on customers' household bills. This increase we are announcing today is reflective of the costs we are seeing, which are beyond our control. We are not raising prices for 3.7 million customers, including those already currently on fixed-term deals, on a prepayment meter or who are vulnerable.”
Mr Hodges adds: “We will continue to engage all our existing customers on our standard tariff at least six times a year to encourage them to switch to one of our new fixed-term deals."
British Gas is the first of the Big Six suppliers to announce price rises this year.
Claire Osborne, energy expert at comparison website uSwitch comments: "The danger now is that the rest of the Big Six may be tempted to follow suit. Customers can send the clearest message that they won't tolerate being taken for a ride by switching supplier to a cheaper tariff, with savings of up to £491 on offer."