British Gas has announced an increase of nearly 4 per cent to its standard variable tariff (SVT) due to a “rapid” increase in wholesale energy costs.
Parent company Centrica announced the 3.8 per cent rise today (8 August) which will come into effect on 1 October.
Centrica cited an approximate rise of 20 per cent in the costs of buying wholesale energy since April this year as the reason for its decision.
The latest rise comes just over two months after the last increase, when the company raised its SVT by an average of 5.5 per cent.
It means the average bill for a typical dual fuel customer will rise to £1,205, an increase of £44.
The British Gas SVT was discontinued for all new customers on 31 March.
Centrica said it actively wanted its customers to choose alternatives to the SVT adding it expected to have only 3 million customers on the tariff by the end of the year, down from 4.3 million at the beginning of 2018.
Mark Hodges, chief executive, Centrica Consumer, said: “We have today reluctantly announced plans for an increase in our standard variable tariff.
“We understand that any price increase adds extra pressure on customers’ household bills. However, this reflects the sharp rise in wholesale energy costs.”
Hodges also cited the ever-increasing competitiveness of the UK energy markets.
He added: “With more than 70 energy supply businesses now operating in the UK, the energy market is increasingly competitive and we are focused on offering all our customers attractive fixed and bundled deals.”
Hodges said the company had until now been able to “shield customer bills” from the impact of the increase in wholesale costs because of the way it buys energy in advance.
Yesterday (7 August) industry regulator Ofgem also announced it was increasing the level of its safeguard tariff for a second time this year because of higher wholesale costs.
Five million customers benefit from the safeguarding tariff, which protects households from overpaying for their energy and from unjustified price rises, the regulator said.
The level of the tariff will be raised by £47 per year for dual fuel customers to £1,136 from 1 October.