It is the rumour none of us wanted to hear, that the UK’s biggest energy provider, British Gas is planning to raise its prices, ahead of the winter freeze, to around 8%, or £100 per household. And analysts predict that price hikes of over 10% will see bills soar to a record high of £1,474.
It is thought that British Gas will make the announcement once the political parties have finished their conferences for the party seasons, next month. And more bad news for fuel consumers suggests that a rival energy provider are also considering putting up their prices.
The topic of energy prices was discussed on BBC’s Watchdog consumer programme this week, where viewers were asked to send in their questions or concerns to the Big Six energy companies; British Gas, SSE, NPower, E.ON, EDF and Scottish Power.
British Gas however has so far refused to comment, stating that it “never comments on future pricing movements”. However, with winter on the horizon, it doesn’t take an industry expert to predict that the price rise will coincide when people will most likely to need their energy more.
One expert, City analyst, Peter Atherton of Liberum, thinks that an increase is certainly possible, and that 8% is “about the right level”, when you take into consideration the rising cost of environmental levies and transmission charges. Last year SSE was the first of the Big Six energy companies to raise prices; they put up charges in August, and reports are showing that people are already turning on the central heating, as the weather has cooled, with an estimated 65% surge in usage last weekend alone.
The real worry is that many people are suffering from the relatively new phenomena of fuel poverty, which is the social condition where people are paying most of their income on heating their homes, and not having enough money for food or rent. Ann Robinson, director of consumer policy at uSwitch, today said: “My great worry is if one puts up prices, they all follow.
Meanwhile pay is falling behind inflation, household finances have got more difficult and a price hike will really mean a lot of misery for a lot of people.” Labour’s shadow energy secretary Caroline Flint has always campaigned against the monopoly across the industry that the Big Six have: “With warnings of more price rises this winter, it’s clearer than ever that Britain needs to break the dominance of the energy giants and protect the public from being ripped off.”
Between the six companies, they supply 98 per cent of households in Britain, but they also made £3.3billion in profits since 2010, all the while customers’ bills have risen by £300 a year. In fact, due to these massive profits, these Big Six energy companies now have to report to regulator Ofgem on their annual profits for generating and selling power.
Many of the companies blame the Government’s green policies behind the price hikes, but with profits in the billions, government ministers are urging these companies to “exercise restraint”.
It appears that British Gas are prepared to go against the advice of MP’s, and even some analysts were reluctant to believe that BG would be the first to hike up prices. As it appears that once one company has announced price increases, the rest of the Big Six follow suit, we suggest you wait a month until you think about switching providers.