British Gas will increase its Standard Variable Tariff by 5.5% from £60 to £1161 for gas and electric customers as from 29 May.
The tariff increase will impact the utility’s 4.1 million consumers but will not have any impact on some 3.7 million customers currently registered on fixed contracts.
British Gas has increased energy costs to match rising policy costs and wholesale energy.
The energy provider says costs to line up with the government’s smart meter rollout programme continue to rise hence the increase.
Despite the increase, British Gas says it is committed to improve the energy efficiency and costs for its customers. The utility is targeting to deliver additional cost efficiencies of £20 per dual fuel customer by 2020.
Efforts include 2017’s halt in registering new customers under the Standard Variable Tariff. Over the past year, the utility has been encouraging customers to register under the fixed-term tariffs.
Over half a million customers were registered under the fixed term tariff model in 2017 and an additional 1.3 million are expected to come on board in 2018. To date, some 900,000 metering points have been registered under the fixed term tariff programme.
Customers who register under the fixed term tariff receive benefits including free energy days, tickets for entertainment venues and free boiler services.
Mark Hodges, Chief Executive, Centrica Consumer said: ” This increase we are announcing today is reflective of the costs we are seeing which are beyond our control.
“Government policies, intended to transform the energy system, are important but they are putting pressure on customers’ bills. We believe Government should level the playing field so the customers of all suppliers pay a fair share of energy policy costs We continue to encourage Government to consider moving these costs out of energy bills altogether and into general taxation.”
British Gas has also introduced a policy of transfering SVT registered customers who fail to renew their contracts within required time to the utility’s new 12 month fixed-term default Temporary Tariff.