Centrica : British Gas Standard Variable Tariff to increase due to rising wholesale costs

This price change is due to the rapid increase in wholesale energy costs since early April, when we last announced an increase in the Standard Variable Tariff. Until now we have been able to shield customer bills from the full impact of the increase in wholesale costs because of the way we buy energy in advance.

Since we withdrew our 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 our 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 our SVT and well below the average of the larger suppliers.

We actively want our customers to choose alternatives to the SVT and we provide many opportunities for them to consider our fixed-term deals. We 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 have 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 we are focused on offering all our 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.'

Any customer concerned about their bill should visit www.britishgas.co.uk.

Enquiries

Notes to Editors

1. Larger Suppliers Standard Variable Tariffs

Supplier	Gas (£)	Elec (£)	Dual Fuel (£)
OVO Energy	547	603	1150
BG SVT until 1 October 2019	580	582	1161
Utility Warehouse	584	617	1175
BG Temporary 1 October 2019	588	592	1180
SSE	578	618	1196
First Utility	538	661	1199
BG SVT from 1 October 2019	598	607	1205
E.ON	591	617	1208
ScottishPower	584	627	1211
Co-operative Energy	622	597	1218
EDF Energy	581	647	1227
Npower	589	641	1230
Average excluding BG*	581	628	1208
* Average weighted on market shares

2. Wholesale Prices - wholesale prices have moved up significantly since early April 2018.

	Wholesale Commodity Price
Reference Period	Gas (p/th)	Electricity £/MWh
9 April 2018	49.90	48.50
26 July 2018	60.29	57.18
% Change	21%	18%

ICE (Intercontinental Exchange) prices - demand weighted average for Winter 18 and Summer 19.

3. On 7 August Ofgem announced an increase to the level of prepayment meter cap and WHD safeguard tariff by £47 from £1089 to £1136. This will affect 1.6 million British Gas customers on these tariffs.

4. The introduction of the Price Cap from 1 January 2019, will see customers on SVT and temporary tariffs subject to Ofgem price reviews twice every year.