British Gas and Centrica Energy Price Hikes Inflict more Pain on Households

British Gas and Centrica have revealed that they will be hiking their gas and electricity prices in November despite rising public and political anger over the continual rise in living costs.

Bills will rise by an average of 9.2pc, taking the typical annual dual fuel bill up by more than £120 to a record of £1,465.

Centrica said it will raise its household charges for electricity and gas by an average of 9.2% from November [Figure 1].

Meanwhile, British Gas said its electricity and gas prices will rise by 10.4% and 8.4% respectively, from November 23.

"We recognise that energy bills are a real worry for hard-pressed households, particularly at a time when the cost of living is rising faster than incomes," said British Gas in a statement.

"Today's announcement, which will add about £2 a week to the average dual fuel bill, reflects the increasing cost of: buying energy in global markets, delivering gas and electricity to the home, and the Government's social and environmental programmes, which are paid for through customers' bills."

Last week, British energy giant SSE revealed that it is raising household energy prices in November despite originally pledging that it would not ramp up tariffs before Autumn 2014.

SSE, one of Britain's big six energy companies which make up 99% of the UK energy sector, announced it will raise its charges for electricity and gas by an average of 8.2% despite saying recently that hiking prices was "the last thing the company wanted to do".

UK electricity and gas prices have rocketed over the past year [Figure 2].

In November 2012, SSE raised its gas and power tariffs by 9%, while EDF Energy raised its tariffs by the highest amount in the market - 10.8%.

Over the last few years, Centrica and other energy suppliers have been accused of making excessive profit from supplying energy to cash-strapped households.

Political Point Scoring

Rising public anger over continual energy price hikes has led Britain's opposition party to make the fight against the 'Big Six' central to their political campaign.

The Labour's leader Ed Miliband pledged in September to freeze energy prices until 2017 if the party wins the general election in two years.

"If we win that election in 2015 the next Labour government will freeze gas and electricity prices until the start of 2017. Your bills will not rise. It will benefit millions of families and millions of businesses," said Miliband in his conference speech.

Following SSE's announcement last week, Britain's coalition government attempted to abate the wave of public anger around energy price rises, after SSE blamed government levies on bill collection.

"This is clearly unwelcome news for customers of SSE. People should take the opportunity now to make sure they are on the best deal available to them," said Energy and Climate Change Secretary Edward Davey.

"Half of an average energy bill is made up of the wholesale cost of energy. This far outweighs the proportion of a bill that goes to help vulnerable households with their bills and to cut energy waste, and to encourage investment in the new low-carbon energy generation we need to keep the lights on.

"SSE's own figures show that wholesale price rises have contributed more than policy costs to this price increase, as a share of the bill."