British Gas to raise electricity prices by 12.5%

British Gas to raise electricity prices by 12.5%

Worked at BP for 29 years before stepping down from the board in 2014 to become CEO of British Gas owner Centrica.

The average annual bill for a typical household on dual fuel on a standard tariff will increase £76 to £1,120, a rise of 7.3 per cent.

Such announcements are highly sensitive because they can affect share prices.

Iain Conn, chief executive of Centrica, which owns British Gas, claimed the move was due to the the "16% rise in the cost of energy and delivery to customers". Ofgem says that the costs of government obligations for energy rose 2.9% between January 2016 and January 2017.

This has sparked outrage amongst numerous companies' customers as they threaten to switch electricity providers to send British Gas a message.

It's half year results also revealed a loss of more than 377,000 United Kingdom customer accounts in the first half of 2017.

Fixed deals however, lock in the unit rates of your gas and electricity for the duration of the deal, often 12 months.

"Energy firms should treat all their customers fairly and we're concerned this price rise will hit many people already on poor value tariffs", a spokeswoman for the Department of Business, Energy and Industrial Strategy (BEIS) said in a statement.

The price hike will leave 3.1 million households forced to fork out more for monthly bills.

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Centrica noted that its direct like-for-like headcount reduced by 1,058 in the first half of 2017 and it remains on track to achieve its targeted reduction of 1,500 for the full year, which will take the total reduction since the start of 2016 to almost 5,000.

The Government's promise of a price cap for all households on standard variable rate tariffs appears to have been watered down in recent months.

Claire Osborne at USwitch said: "At a time when living costs are rising faster than wages, this hike could push many families into the red".

Mr Conn replied: "Well certainly 3.1 million of our eight million customers will be affected".

Theresa May attacked Npower's planned 15% price hike as "shocking" earlier this year and announced plans for an energy price cap in May. This followed a government request to set out plans to help those placed on the poorest-value tariffs.

British energy supplier Centrica said it expects to produce up to 30 billion cubic feet (bcf) of gas from its Rough gas storage site by the first quarter of next year, subject to regulator approval.

"It was the only one of the big 6 firms not to raise prices at the start of the year, and now, as predicted, it'll do it from September".

He commented: "We have made further significant strategic progress, continuing to reallocate resources away from our asset businesses towards our customer-facing businesses".

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