Published: Wed, August 02, 2017
Markets | By Lucia Cruz

Why has Centrica raised British Gas electricity prices?

Why has Centrica raised British Gas electricity prices?

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

It means the average annual dual fuel bill for a typical household on a standard tariff will rise by £76 to £1120 - an increase of 7.3%.

Government sources reiterated Theresa May's threat to hit the industry with price capping if charges kept on being hiked.

The increase in the price of electricity is the first since November 2013.

"It is transmission and distribution of electricity to the home and government policy costs that are driving our price increase", said Centrica chief executive Iain Conn on BBC's Today Programme.

In response, the government said its policy costs "could not explain" these rises by British Gas.

Details of the increase comes as Centrica revealed its earnings plunged by more than a quarter after it lost 377,000 United Kingdom customer accounts in the first half.

British Gas' price hike follows a price freeze announced in February that it said would last until August.

A BEIS spokesman said: 'Energy firms should treat all their customers fairly and we're concerned this price rise will hit many people already on poor-value tariffs'.

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"Let this be a clarion call for British Gas customers (and all those on big 6 standard tariffs) - do not sit on your backside and just take this".

His total remuneration package past year was £1.9 million - although he could end up being paid as much as £4 million. British Gas claim the rise is because of increased costs but Ofgem data shows that all their costs - wholesale, network and policy - have dropped by nine per cent since December 2016.

British Gas is the last of the Big Six providers to increase prices after it promised past year to freeze tariffs until August.

Around 5.3 million people are either on fixed deals or only buy gas from the firm, says The Times.

British Gas has installed more than 4 million smart meters so far.

LONDON, Aug 1 (Reuters) - Britain's largest energy supplier Centrica raised its household electricity prices on Tuesday to try to turn around a loss-making part of its business despite shedding another 485,000 customer accounts in under two months.

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.

In the run up to the June General Election, the Conservatives promised and energy price cap, in a supposed departure from traditional Tory liberal economics which rejects state interference in the market.

The Energy Department spokeswoman added: "We want to see rapid progress on this commitment".

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