British Gas has today announced an increase in prices for all domestic gas customers from 1 April and indicated that further changes are extremely unlikely this year. At the same time it will cut domestic electricity prices for customers in England and Wales.
The increase, averaging 4.7 per cent, is largely in line with those already announced by other major suppliers, and results from the significant escalation in gas costs affecting the whole industry.
The British Gas price rise will add £14 to the average annual bill for mains gas customers, which equates to less than 27 pence per week. It will be applied from April so will not affect winter bills.
The announcement was accompanied by news of an average reduction of 3.7 per cent in electricity prices from 1 April. More than 3.5 million customers who take electricity from British Gas in England and Wales will see an annual reduction of £9 in their bills. The great majority of these are customers who buy both fuels from British Gas and who will therefore see an average increase of only £5 a year in their overall energy bill.
The cut reflects the fact that electricity wholesale prices have already fallen in anticipation of new electricity trading arrangements, NETA, which are to be introduced shortly in England and Wales.
Electricity prices will not change in Scotland. For more than two years customers have, on average, enjoyed greater savings than in England and Wales as a result of supply contracts negotiated under different trading arrangements there.
Mike Alexander, Managing Director of British Gas Trading, said: "We wanted to act now to reassure customers who have been concerned by the recent speculation about high price rises as a result of increased gas costs. Not only is the increase much lower than many predicted but it is extremely unlikely there will be any further change this year.
"We have worked hard to protect customers from the volatility of the current gas market and customers can be assured that we remain committed to pricing competitively and providing value for money. Our track record is evidence of this and shows a reduction in gas bills of nearly 20 per cent in real terms over the past five years."