The price change is due to the rapid increase in wholesale energy costs since early April, when British Gas last announced an increase in the Standard Variable Tariff (SVT).
Until now they have been able to shield customer bills from the full impact of the increase in wholesale costs due to buying energy in advance.
Since withdrawing their SVT to all new customers in March, any customers who don’t actively choose a new tariff upon expiry of their existing fixed-term contract will roll on to the new default 12-month fixed-term Temporary Tariff. The Temporary Tariff will be priced at £1180 for a typical dual fuel customer from 1 October, £25 less than their SVT and well below the average of the larger suppliers.
British Gas actively wants their customers to choose alternatives to the SVT and they are providing many opportunities for them to consider our fixed-term deals. They expect to have only 3 million customers on the SVT by the end of the year, down from 4.3 million at the start of 2018.
Mark Hodges, Chief Executive, Centrica Consumer said: “We have today reluctantly announced plans for an increase in our Standard Variable Tariff (SVT). We understand that any price increase adds extra pressure on customers’ household bills. However, this reflects the sharp rise in wholesale energy costs”.
In response to rapidly rising wholesale market costs, since April a number of other energy supply companies have increased their SVT prices and Ofgem has also announced a second increase to the prepayment meter cap.
With more than 70 energy supply businesses now operating in the UK, the energy market is increasingly competitive and they are focused on offering all customers attractive fixed and bundled deals.
As well as providing more choice, we are striving to improve customer service levels, reducing our own costs and rewarding customers. Our British Gas Rewards programme now has more than one million members taking advantage of offers which reward loyalty and encourages engagement.”
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