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British Gas tight-lipped on 'hike'
British Gas is reportedly planning a price hike that could add £100 to annual bills despite vowing earlier this year to use an earnings windfall from the cold weather to keep a lid on tariffs.
Any increase would mean the promise by owner Centrica going up in smoke after just four months and was branded a "slap in the face for consumers". The company, which supplies 12 million homes, declined to comment.
According to the Evening Standard, the rise could come as early as October just as temperatures start to plunge, with a hike of up to 10% that could add more than £100 a year, taking a typical "duel fuel" bill to a record £1,474.
It comes amid speculation that other so-called Big Six suppliers - who also include SSE, EDF, Scottish Power, E.ON and npower - are also preparing to increase prices amid rising costs, despite soaring profits following the freezing weather earlier this year.
British Gas previously hiked tariffs by 6% last December, a rise that helped Centrica cash in handsomely on the misery of householders over a bitterly cold period, as gas consumption rose 18% in the first four months of this year compared to 2012.
The company said in May that because of the economic pressures facing many customers, the board had decided that any benefit from the exceptionally cold weather would be used to maintain "price competitiveness". A spokesman said at the time: "We will use that to effectively hold prices for as long as possible."
Results in July showed earnings at British Gas's residential arm rose 3.2% to £356 million for the first half of this year thanks to the cold freeze while adjusted operating profits at Centrica were up 9% from £1.45 billion to £1.58 billion.
But by then Centrica was already hinting at further price rises, complaining that a new duty to pay for energy efficiency measures in customers' homes had hit earnings.
The group said that the £1.4 billion bill for the scheme would "inevitably impact on customer bills ultimately" as it faced "upward pressure on costs", although finance director Nick Luff said any price rise would be held off "as long as possible".
Centrica pointed out that its profit margin for the British Gas residential business fell from 7.2% to 6.5% and that it only increased profits in the first half because the weather was unusually bad.