Responding to British Gas putting on their website today (31st July 2017) a post titled “Why we’ve had to raise electricity prices – our first increase since November 2013” the day before they publish their half-yearly results,
Will Hodson of consumer collective the Big Deal, said:
“The cat is out of the bag. British Gas will probably just blame the intern but it looks highly likely that a price rise is on the way. That’s bad news for 6 million British Gas customers and unjustifiable given that British Gas’s costs have dropped by 9% since December last year. The Government must act to stop this kind of Big Six behaviour.”
Bloomberg article on the British Gas website error: https://www.bloomberg.com/news/articles/2017-07-31/british-gas-web-bungle-appears-to-show-price-hike-announcement
Notes to editors
New research shows that British Gas should be cutting bills not putting them up. Analysis of energy regulator Ofgem’s Supply Cost Index by collective switching site the Big Deal shows that since a peak in December 2016 the costs for energy companies have fallen by 9% mainly due to a drop in wholesale prices.
British Gas first announced a price freeze in December 2016 and later said that they could freeze prices “despite increases in external costs [wholesale prices], because we have significantly reduced our own costs.”
Now that those external costs have dropped there is no reason for British Gas to raise prices. Instead they should be passing those reduced costs on to the customer in lower not higher bills.
Ofgem Supplier Cost Index between December 2016 and January 2016
|Month||December 2016||January 2017||February 2017||March 2017||April 2017||May 2017||Cut in costs between December 2016 and May 2017|
|Supplier Cost Index for Dual Fuel||104.7||98.5||101.9||100.1||96.3||95.7||8.6%|
Source: Ofgem Supplier Cost Index
Ofgem Supplier Cost Index shows a 9% decrease in wholesale prices for a dual fuel customer between December 2016 and May 2017. https://www.ofgem.gov.uk/electricity/retail-market/retail-market-monitoring/understanding-trends-energy-prices#thumbchart-c8329010666635703-n106412
British Gas makes half a billion in profit and CEO of Centrica earns £4.15 million
- British Gas made £553 million in profits during 2016, while losing over 400,000 customers. Iain Conn, head of British Gas’s parent Centrica, received a 40% pay rise in 2016 making his total pay £4.15 million.
British Gas’s press release on their price freeze – https://www.britishgas.co.uk/media/r/1454/british_gas_extends_its_price_freeze
Centrica boss Iain Conn reported in the Sunday Times on 23rd July 2017:
- “Next month there could be more pain, Conn hints. That’s when British Gas’s six-month pledge not to increase gas and electricity prices comes to an end. Costs have risen 15% over the past year for energy suppliers, he says, and “we are not immune from those”. “We are going to have to pay attention to all of that as we think about pricing,” he adds ominously.”
About the Big Deal
The Big Deal is a consumer collective focused on reducing people’s energy bills. We bring together tens of thousands of consumers and use our collective buying power to create exclusive deals.
Launched in March 2014, we now have over 350,000 members and continue to grow. 62% of our members have never or hardly ever switched before – these are the very people who have been let down by the energy market for too long. Moreover, 60% of our members are over the age of 55 and 30% over the age of 65. We have saved the British public over £15 million since we launched.
The Big Deal is a start-up business and charges a commission to energy companies. Unlike price comparison websites we are 100% transparent and publish the exact amount of our commission. For our most recent switch it was £50 for a dual fuel (both gas and electricity) switch. This compares to £60 to £100 for the main price comparison websites.
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