British Gas has become the fourth and largest big six supplier so far to raise its standard variable tariff (SVT) to the revised Ofgem level.
The supplier, owned by Centrica, has not commented directly on the latest increase. Instead it referenced its announcement in January in which it said it intended to adjust its SVT and default tariff pricing to broadly reflect changes to the cap made by Ofgem.
The industry regulator announced the cap on default tariffs will increase by £117 to £1,254 while the price cap for pre-payment meter customers will rise by £106 to £1,242 a year for the six-month “summer” price cap.
The new level will come into effect on 1 April and will be reviewed again later in the year.
In response to the news about British Gas, Stephen Murray, energy expert at MoneySuperMarket, said: “Ofgem opened the door to supplier price rises earlier this month and now the big six are kicking it down.
“The UK’s biggest energy supplier has the largest number of customers on standard variable tariffs and today’s (19 February) announcement means it is instantly adding a cumulative £409 million to those customers’ bills.
“There’s a lot of noise about the energy price cap at the moment and how it’s supposedly delivering a fairer price on energy bills and protecting people from getting ripped off by suppliers.
“But with the level of the cap set to rise by £117 at the start of April, that couldn’t be further from the truth and there’s really only one way for people to bring their bills down – and that’s by switching.”
Richard Neudegg, head of regulation at Uswitch, said: “British Gas’ confirmation that it is hiking bills up to the maximum permitted by the price cap should surprise no one, but that doesn’t mean their customers should fall for the price cap trap.
“Bill payers on standard tariffs cannot be ‘protected’ by a cap that will change every six months – these customers sit at the mercy of a spreadsheet.
“With more suppliers expected to raise their prices to the new cap, over half the energy customers in Britain could be affected.”
Sally Jaques, head of energy at auto-switching website Weflip, added: “3.9 million British Gas customers on the supplier’s standard variable tariff (SVT) are in for an inflation-busting hike to their energy bills, which will see the average SVT rise by 10.5 per cent (£119.12) for a dual fuel tariff, from April.”
Meanwhile Alex Neill, Which? managing director of home services, said: “The energy price cap will be cold comfort for the millions of British Gas customers who will now face eye-watering price hikes in April.
“This is the fourth price increase announcement in quick succession with the rest of the big six expected to follow suit.”
Centrica is expected to announce its preliminary financial results for the year ending 31 December 2018 on Thursday (21 February).