British Gas has announced today that gas and heating fuel bills are likely to rise again as its profits are squeezed by higher gas and power prices. Centrica, the owner of British Gas, said it would take “action to deliver reasonable margins”.
British gas has explained it was reacting to wholesale gas prices increase of 92% from a year earlier, with the wholesale electricity costs doubled during the same period. The company added that its profits would be materially lower in the first half of 2008 despite the price increases of retain gas for domestic heating and cooking.
In January 2008, British Gas has increased gas and electricity bills by an average of 15% due to rising wholesale prices.
Average household bill for heating is now estimated to rise by about 10% (roughly £105), by late summer with an additional hike of 15% (roughly £173) in January 2009.
Energywatch, the industry watchdog, said that if British Gas raises prices, other energy suppliers are likely to follow suit. Allan Asher, Chief Executive of Energywatch said: “sadly if one company goes ahead and raises prices, others will follow. This is terrible news for the fuel poor.”
Financial analysts have estimated in April that Centrica’s residential arm (supplying heating gas) could be making a loss in the first half of 2008, unless it raised domestic gas prices.