British Gas 'Might Hike Rates'

The parent company of British Gas dropped a big hint yesterday that consumers could expect big bill hikes in months to come.

Centrica, which retains around 16 million gas and electricity customers in the UK, said that trading conditions remained similar to those experienced last month - which is likely to mean that prices will be put up in order to protect shareholders' dividends. This is because Centrica released a report in May, which said that year-on-year profits were "materially lower", due to margins being squeezed by the rising costs of wholesale gas.

"While the current outlook for gas prices does create a challenging environment for energy suppliers, we will take the necessary action to deliver reasonable margins in the retail business," the firm said in the statement.

Wholesale prices have increased threefold over the past 12 months, a trend which could lead to bill hikes of around 40 per cent according to figures obtained to the Times newspaper. This would bring the average household energy bill up from £1,048 to £1,467.

British Gas, along with other large gas and electricity firms, previously introduced 15 per cent price rises on general tariffs at the beginning of the year, again citing rising wholesale costs.
 

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