British Gas - shock price increase

Published:
30 July 2008
Topic:
News,Gas & Electricity,Money

British Gas has announced that it is hiking gas prices by a whopping 35 per cent with immediate effect, while electricity prices have been increased by 9 per cent. This means customers on its standard tariff are now paying 56 per cent more for gas than they were at the beginning of the year.

This move by British Gas comes on the back of EDF Energy's announcement last Friday that it was putting gas and electricity prices up by 22% and 17% respectively and the other major providers are expected to follow suit within weeks, if not days.

With many households already struggling to meet spiralling energy bills, demand for fixed rate products has soared in recent weeks as consumers seek protection from further increases.

However, anyone who has yet to fix their energy costs needs to act now as British Gas and Scottish Power have both pulled fixed rate deals in the past two days. Eon's Price Protection 2009, which costs an average of £1,102.39, could also be pulled at any time.

Once Eon's product is withdrawn, the cost of fixing will be much more expensive. EDF launched a new deal yesterday which is fixed until October 31 2009. The cost for the average household is £1,229.42. British Gas has also announced a new fixed rate where prices are guraranteed until September 2011. This will cost around £1,260 a year.

Despite these price hikes, many households could save money on energy bills. If you're happy to go for a variable rate product, opting for an online tariff and paying by monthly direct debit remains the most cost effective option. That said, British Gas' Click Energy 5 tariff is the cheapest deal for most people and the provider has not yet increased prices on this product so they could change in the coming weeks.

Our gas and electricity comparison tool will help you find the most competitive deal for your circumstances.

You can also cut around 20% off your annual energy costs by taking a few simple steps. These include:

  • Turn your heating thermostat down by 1°C.
  • Run your washing machine at 30°C.
  • Use energy-saving light bulbs.
  • Buy a lagging jacket for your hot water tank and insulate pipes.
  • Don't use more water than you need when boiling the kettle.
  • Turn the light off when you leave a room.
  • Don't leave electrical appliances on stand-by - turn them off completely.

Disclaimer: Please note that any rates or deals mentioned in this article were available at the time of writing.

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