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July 27, 2006
British Gas Increase Domestic Electricity and Gas Prices
British Gas today announced a change to its domestic gas and electricity prices. The change is set against a backdrop of further cost increases in the wholesale energy market and a record £143 million loss by British Gas' residential energy business in the first half-year of 2006. This follows a loss of £75 million in the second half of 2005.
Despite hopes that the energy market might stabilise, the continued high cost of energy has led British Gas to increase its residential gas prices by 12.4 per cent and electricity prices by 9.4 per cent with effect from 4 September 2006. Over the period between winter 2002/3 and this next winter the wholesale cost of gas has risen by 266%; it is up 71% in the last 12 months alone. The company, therefore, has no alternative but to increase prices.
Mark Clare, British Gas Managing Director, said: This winter is crunch time for the wholesale cost of gas. As a result of the investments and commitments we have made we can see some light at the end of the tunnel but it's still a winter away. During 2007/08 we should see new infrastructure coming on stream putting downward pressure on wholesale energy costs.
However, he added: As Britain becomes increasingly dependent on imports we are much more exposed to the factors that impact global gas prices. We also face a huge anxiety premium in the cost of this winter's gas because of the impact of soaring oil prices and uncertainties over how much new gas will flow from Europe. Last winter's experience has shown that new pipeline capacity does not guarantee the flow of gas.
Despite being on target to take £200 million of costs out of British Gas' residential energy business by the end of 2007, it's a stark reflection of the market that our losses have doubled. Without a price rise these losses would deepen further. This is unsustainable. Were it to continue we would not be able to invest in the new supplies necessary to reverse this spiral of increasing wholesale costs. In the last 12 months alone we have invested £600 million in new energy assets on top of the £18 billion of commitments we have already made to bring new gas to the UK.
Without doubt this is only the start of the double digit price increases predicted by Energylinx as this British Gas announcement follows a similar announcement on prices earlier this week.
Energylinx would encourage all customers to look very seriously at capped or fixed prices deals as soon as possible. We have already had three fixed price tariffs close for new business this year and each time prices increase there is a distinct possibility that existing fixed price tariffs may close, so advice from Energylinx is act now.
Energylinx is largest specialist domestic energy price comparison in the UK that allows users to compare the prices of every single gas and electricity supplier. With so many companies in the market it becomes ever more critical that the domestic customer ensures that any comparison provided is 100% impartial.
Domestic customers can do this by logging onto any of the following links or to call Energylinx on 0800 849 7077 for a personalised quote. Energylinx will then send you a detailed domestic energy quote.
These Energylinx calculators are unique in that they allow you to compare the prices of all energy suppliers.
Energylinx will arrange the whole transfer process for you, including notifying your existing supplier of any planned change and tracking the transfer to ensure that it occurs on time and accurately. Energylinx provides its services completely free of charge to the domestic consumer.
Posted by energylinx at July 27, 2006 07:31 AM Technorati: Energy Prices
