Britain’s biggest supplier Centrica has warned that household energy bills for the year will soar by an unprecedented 15 percent. Its flagship company British Gas has added that there would be a further increase in the bills in the face of escalating gas and electricity costs.
Centrica said in a statement that higher wholesale costs meant it was necessary “for further increases in retail energy tariffs, as has also been signaled by other suppliers.” British Gas could face further depletion in its customer base if the price rise goes through; it has already lost 445,000 since the start of the year.
British Gas managing director Mark Clare said, “All suppliers are facing declining UK gas reserves, high oil prices and the lack of access to European pipelines to get new gas supplies to the market. In the long term, the better news is the investments British Gas is making to secure future energy supplies should help put downward pressure on prices which in turn would benefit consumers.”
Centrica said that wholesale gas prices this year were expected to be 51 percent higher as compared to last year. Consumer group Energywatch warned that these increases would adversely affect Britain’s poorest households, “There comes a point where customers can’t bear any more. Any price rise will have a terrible impact on low earners and vulnerable people. It may be time for companies to think about social tariffs and ways of helping the vulnerable,” it said.
Jeremy Nicholson, director of the Energy Intensive Users Group, which represents companies that use large amounts of energy, said, “This puts manufacturers in an awful position. If they are able to pass the costs on to consumers they will, but manufacturing firms are often competing in international markets and can’t, and so it harms their profits.”
Shona Robison, the SNP shadow health minister, said, “It is very unfair of British Gas, who make such massive profits, to pass this increase on to customers, particularly those on low and fixed incomes. It will increase poverty among groups like the elderly, many of whom are trying to get by on their pensions. I also dread to think how it will affect the health and well-being of those with babies and young children who have so many other calls on their resources.”