15% increase in British Gas prices likely

07 July 2008

Price rises expected from all big energy companies in next few months

It is likely that British Gas, the UK’s largest energy supplier, will increase its prices by at least 15% - a move which could hit its 16 million customers hard within just weeks.

According to the Times Online, Centrica, which owns British Gas, is currently having trouble with maintaining its profit margins in the retail sector because the cost of wholesale gas has tripled over the course of the past year.

However, similar moves are expected from the other big energy companies – Npower, E.On, EDF Energy, Scottish Power and Scottish and Southern Energy – soon after because they are all facing the same pressures.

Centrica is expected to be one of the first to increase its prices because they have to pay premium prices on the open market due to a shortage of its own gas and power supplies.

A senior industry source said: “They are really feeling these prices... so it is just a question of how long they can hold on without being forced to issue a profit warning. Nobody wants to be put in that position.”

Another source said: “By the time you get into September, the volumes of gas being used increases sharply which magnifies the losses, so the end of August would be the very latest.”

Click the link to compare gas and electricity prices