Switching stampede forecast as Scottish-Gas owner raises electricity prices by 12.5%

Big Six energy provider Centrica – which owns the Scottish Gas and British Gas brands – is to hike electricity prices by 12.5 per cent for its 3.1 million customers.

Its gas prices remain unchanged, but the average annual dual-fuel bill for a typical household on a standard tariff will rise by £76 to £1,120.

Iain Conn, Centrica chief executive said that wholesale costs had gone down and were not the reason for the price rise.

He explained: “We have seen our wholesale costs fall by about £36 on the typical bill since the beginning of 2014 and that is not the driver.

“Rather it is transmission and distribution of electricity to the home and government policy costs that are driving our price increase. We are selling electricity at a loss and that is not sustainable.”

But the government said its policy costs “could not explain” the Centrica rises.

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.

“Government policy costs make up a relatively small proportion of household energy bills. Wholesale prices are the bigger portion of household bills and are coming down.

“The Business and Energy Secretary has written to OFGEM asking what action the regulator intends to take to safeguard customers on the poorest value tariffs and the future of the standard variable tariff.

“In response, OFGEM has committed to taking prompt action, in consultation with consumer experts, to develop proposals including a safeguard tariff.

“We want to see rapid progress on this commitment and we are ruling anything out – whether it is action by the regulator or legislation – to increase fairness for customers.”

The so called Big Six of the UK’s largest energy suppliers have a strong hold over energy prices, and successive governments and parties have pledged to introduce some form of price controls in recent years and decades.

But the number of customers switching between energy suppliers continues to increase – about 7.8 million domestic energy accounts were switched in 2016, an increase of 27% on 2015.

A spokesman for the money-saving website www.VoucherCodesPro.co.uk commented: “As the UK heads into possibly the most uncertain economic time of its history, British Gas is once again demonstrating incredible arrogance by raising its prices.

“We speak to thousands of money savvy consumers every day and we can confidently predict that this may cause the largest mass utility switch ever.

And Craig Dalzell, a researcher for the Common Weal, a Scottish think tank, said that the Centrica hike had highlighted the “oligopoly” in the UK’s energy market.

He said: “Once again questions are being raised about the sustainability of supplying energy via an oligopoly of just a few companies.

“The fact of modern Britain is that people simply cannot live without energy yet they are being squeezed by both rising prices as well as flat or falling wages. Too many already have to make the grim choice of ‘heating or eating’.

“The government must do what it can to minimise fuel poverty before winter closes in again.”

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