Gas price hike could push more households into fuel poverty, warns study |
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Tue, 31 Jan 2006 09:00
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LONDON: The sharp increase in energy prices proposed by British Gas will lead at least 250,000 British households into virtual fuel poverty, according a new study. The company is targeting a 15 per cent increase in rates this year.
The study, carried out by energy price comparison website iSwitch.com, said the rise in energy bills will neutralise the government's efforts to cut down the number of people who struggle to pay for heating. It is highly unlikely that the government could meet its target of eradicating fuel poverty by 2016, uSwitch said.
A recent report from the department of trade and industry revealed that as many as 1.5 million households face fuel poverty at the start of 2005, as they spend as much as 10 per cent of their income in heating their homes to an adequate standard. The department estimates that for every one per cent increase in fuel bill, nearly 40,000 households are pushed into fuel poverty.
Centrica, which owns British Gas, had notified in June last year that customers should expect increase in gas prices in 2006 as the company is faced with increases in wholesale prices of gas and electricity. British Gas had lost 1.1 million customers in 2004 after it raised prices by 12.4 per cent in September that year following a 5.9 per cent increase in January.
Other gas and electricity companies in the country too have raised their prices.
Ann Robinson, director of consumer policy at iSwitch said it is a worrying time for vulnerable customers, with record price hikes expected to be announced and a colder-than-average winter forecast. "We are increasingly aware that more vulnerable customers are at grave risk of falling into fuel poverty," she added.
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Gas Prices Likely To Rise - Tough Road Ahead 