Chris Johnston
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Centrica, the owner of British Gas, said today that it is raising gas prices by 35 per cent and electricity by 9 per cent after profits at its residential business fell by 69 per cent in the first half.
The move is in response to a rise of £2 billion in market commodity prices.
Centrica also announced that dual-fuel prices will rise by 25 per cent, meaning that its 16 million customers face paying an extra £261 a year for energy, taking the average bill to £1,305.
The price rises are the most severe to hit consumers this year and follow EDF's decision on Friday to increase electricity prices by 17 per cent and gas bills by 22 per cent.
Centrica blamed soaring wholesale gas prices, which have risen from 48p to 90.8p per therm, for the increase in household bills. Forward wholesale gas prices for the coming winter have increased by 89 per cent on the same period last year.
Phil Bentley, managing director at British Gas, said: "We very much regret that we have had to make this decision at a time when many household budgets are already under pressure.
"The simple fact, though, is that we have entered an era of unprecedented high world energy prices.
"The only answer to cope with higher energy prices, I’m afraid, is for all of us to be more energy efficient and we will be contacting all our British Gas customers to show how they can save energy to try and offset these price rises.”
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time to renationalise the utility companies as they obviously need subsidising to provide basic services at a reasonable cost.
Jonathan Underwood, Edinburgh, UK
So 48p to 90.8p is the equivalent of $0.95 to $1.80. For reference, in Boston we pay $1.77 per therm as of July 1st, 2008.
The 48p to 90.8p is what they pay for the gas , not the price they charge the householders. Its much more ..
fw, Glasgow,
Those complaining that the UK pays less for its gas than the United States *should* keep in mind that the pound is now worth about twice as much as the dollar. So 48p to 90.8p is the equivalent of $0.95 to $1.80. For reference, in Boston we pay $1.77 per therm as of July 1st, 2008.
Eric Herot, Boston, United States
I just wonder when the SFO will be investigating the facility companies for price fixing.
Barrie, Bury St Edmunds,
Yes,I read their 1st HALF year profits fell to £166 million.Poor them,how on earth is that enough for a profit?These things should never have been privatized,along with the railways.But,it's very very difficult to reverse it.Shame for us really.
Beverly, Conwy,
I signed up for the price protection 2010, I am just wondering whether they will find some little clause to get round this?
R Faulkner, Canvey Island, Essex UK
Those in the energy chain now have to accept they are likely to be directly responsible for the death of other human beings in the Winter. It would be interesting to hear them defend themselves, when does the greed end?
John, Cheshire,
I think if the gov. reduced the gas duty/tax then the gas companies would not have these massive increases.
Louis, Baton Rouge, USA
One word answer: GREED!
J Adkins, Le Pas, France
I have seen so many manufactures are going to red due to the high cost of the energy bills and consumers are suffering from the raising energy bills, but all energy companies are still making huge profits.
They are hiking the price again. Why should we accept that?
John , london,
I can just see it now, this winter influenza will increase, hospitals will be even more over worked and this country will be decending into further turmoil.
The only thing the public have got going for them is that our climate is warming up, so maybe our energy bills wont be that bad afterall.
Rowan, LONDON,
People calling to renationalise gas/electricity! Plans for tax-payer backing for mortgages! Government under-writing of UK banks! In one year a sizeable number of the changes initiated in the 80s have come under review and found to be wanting, namely in the free-market/deregulated/profit sphere!
Simon, Leeds, UK
One answer - re-nationalise now
John, Leeds,
35% increace in UK, 10% in the EU.
Most of this difference is due to the pound falling against the Euro when the BOE cut rates 3 times at the end of 2007.
Hands up who still thinks low interst rates are "good"?
Not you Darling! Anyone else?
Michael, Bay of Plenty, New Zewaland
This is usury - I believe that there is a law under this title that can be instigated against them. Try a single year with no dividends.
Mike, Nottingham, UK
Hi Andrew, electricity is far cheaper in France since approx 80% is generated by nuclear power stations and therefore much less influenced by increases in the price of fossil fuels. Despite your supplier remaining the same, the fuel mix used differs between the two territories.
Albert, Milton Keynes, UK
35% seems a lot, but don't forget they promised no more increase for 2008. Plus all the users had the opportunity to block their gas prices for 2 years not long ago, the ones who did are the real winners. Always read the offers/deals from these suppliers as some good bargains can be made.
Max Power, Watton, UK
In Spain the situation is similar. Electricity prices has risen over 10%. This global problem is because China is demanding a lot of energy.
"Law of supply and demand"
toni, vlc, spain
I see everyone is blaming GB for this and telling him to stop the rises. This is a capitalist economy and therefore the companies can charge what they like with the only thing keeping prices down being competition (not there is any). The answer is to use less!
Andy, Southend, UK
Wasn't it not too long ago that British Gas hiked their electricity prices twice in quick succession which led to many customers leaving? Perhaps they now wish to try the same with their gas customers. I imagine it'll have the same result.
Neil, Norwich,
The time has now come that proof of the countries assets being sold off were a mistake. Many people in the UK will be faced with some very hard choices this winter and that is wether to put food on the table or stay warm.
Put the utility companies back in public ownership.
John Finningham, Gillingham , UK
Rob from Hull
That is brilliant! Well done... .any suggestions for alternatives?
Paul, Chester,
I recently contacted a home insulation company who quoted me a government subsidised £150 to insulate my cavity walls.Within a month that price had risen by a third to £200,Had the cost of insulation risen by a third or was this pure opportunism? Moral? the consumer can't win
Andrew, Bristol, UK
I would like to know why the cost of electricity for our home in the UK has risen by 7 times that of the same product from the same company over the same period as for our home in France.Could it be that this climate change obsessed government is colluding with the energy companies to make a point?
Andrew, Bristol, UK
Dear Paul,
The present energy companies operate as a virtual cartel anyway. And theres no real justification for ever-diminishing natural resources being in the hands of a few companies, which can commercially exploit energy shortfalls.
Renationalise the lot.
Derek, Taunton, UK
I remember having a conversation with a friend about what life must have been like in the 17th Century with horses and carriages and candles and whale lamps? I guess we are going to find out!
Anyone with a coal fired fireplace is lucky!
Mark, Maidstone, England
The energy suppliers seem to take it in turns to be the first to announce price hikes and absorb the flak ,when inevitably all of the other suppliers will soon follow, so it's no use trying to jump to a cheaper supplier.It looks like the main energy producers have us by the throat, whoever they are.
gerry, merseyside, uk
These firms don't seem to have realised that if their profits drop then it's because their prices are too high. The answer is NOT to increase prices but to DROP them. Then people will buy more.
I have a wood burner, use bottled gas and use the barest possible amounts of electricity and heating oil.
Keith, Grantham,
I understand that 'Centrica' share price increased today by about 3%, specifically after this announcement, with a gain of nearly 9p a share. A coincidence?
Who cares - certainly not the English Government!
Gerallt Huws, Talsarnau, Cymru
I'm afraid, Yvonne, that is the essence of it. Privatisation, bonuses and the interests of shareholders, that what counts. I suppose we can thank various governments for this entirely predictable scenario.
Alan, Edinburgh,
First thing to do, Brown, is RENATIONALISE gas and electricity. These are basic commodities that everyone needs and should be run for the benefit of all, at affordable prices. At the very least, and in the short term, you should prohibit these enormous rises
immediately!
Then there's the railways ..
Ian Dickson, Brighton, UK
35% is a massive increase. Can it really be justified?. It's a major blow to receive this delightful news now when inflation is on the rise and wage increases are being capped. Mr Brown must must look to increase grants for home owners to purchase efficient technologies like solar and wind power.
Geoff, Newcastle, UK
You got to move to a hotter climate and forget that old gas business, And as for burning coal can you imagine if everybody started burning coal again you wouldn't be able to find your way to the pub and incidentally they are not giving coal away for free either.
Peter, Vancouver. BC., Canada
All domestic customers of British Gas, LEAVE NOW!
Robert, Hull, UK
Dear Derek,
The government ownership of any resources is an error none of us can afford. Who finds the stuff and gets it out of the earth, who pipes it to your door? For goodness sake, the world is changing, new economies elsewhere are tapping in to what was our preserve, and we'd better adjust.
Paul Freeman, London, England
Why on earth are our European neighbours paying less for their energy than us? And why does the Government allow us to be ripped off time and time again without acting?
I don't believe for a second that this due to increased wholesale prices but as a way of protecting their enormous profits.
Nikki, Manchester,
No doubt that even though profits are down the gas fat cats will be raking in massive bonuses. Somebody has to pay for those bonuses this is the fat cat world we live in.
It's OK for fat cats and the lower end on their family credits. If you are in the middle you have to pay for the others.
Fred, Moray, Scotland
This is what happens when you privatise essential services. They have to make a profit because they are BUSINESSES. People may cut down their consumption, but it doesn't work that way: prices will soar even more to keep those profits high.
Yvonne, Doncaster, UK
My jaw dropped open (literally) when I read this. Gordon Brown and team, WHAT are you going to do about this? Answers to the effect that poorer people will get lower prices are NOT good enough. Answers to do with market forces and gas prices being linked to oil are not good enough. DO something!
David, Sheffield, UK
Time to buy British Gas shares then.
As the price of gas falls for the summer .British Gas shares price has come down also.
It has always moved up again for the winter.
Mid August seasonally is the best buying time
Nicholas Iles, Oswestry, Shropshire, United Kingdom
So, to protect the shareholders, we will have to face an astounding hike in prices? Something is badly wrong, we need major changes and we need them now.
Carl, London,
I think its time to go back to the days of coal fires to heat your home & boil the water? Surley this is a cheaper option now!
Marc, Isle of Wight, England
It is time for energy sources to be cheap and safe. The carbon fuels are not the fuels of the future. It is possible to burn sea or salt water H2O by separating the molecules using sound frequency or oscillating microwaves. This safe alternative has to be supported by all and environmentalist.
John Fielding, Lancashire, UK
Once my price protection with British Gas ends in 2010, I'll be removing my gas fire and having an open fire, and I'll replace the boiler with an electric heater. Gas is finished. Get used to it.
Louise, Doncaster, UK
The government stoked the fire, and now we burn our hands. pity we can't afford the water to put the fire out....
Neil, Maidstone,
BG lose money on residential energy supplies, if they were to be renationalised, then we the tax payer would be subsidising those losses! No thank-you!
If you want to cut your bills, use less product = Simple!
Marc, Windsor, UK
Strange how European countries still get it cheaper than us!
John, Salford, England
With North Sea way past peak, a distinct lack of storage and a heavy reliance on import it's no wonder. This is a nations fault not BG's.
Steve, Cheltenham,
If past performance is anything to go by, I look forward to hearing from British Gas customer services sometime in September informing me of the price rises.
Diana, Derby,
Renationalise the lot. Right now. The commercial ownership of diminishing natural resources is a luxury none of us can afford.
Derek, Taunton, UK
I wonder what sort for profit these companies will be reporting next year.
Phil, Reading,
Wholesale Gas prices have fallen 33% in July from a peak of 13.50 to todays price of 8.96. How on earth can this rise be justified? The government should act now
Bruce, London,
Same applies as with EDF. Gordon Brown must prohibit these increases, not hide behind regulator. If he want's to salvage some credibility he will act NOW,
A.Williams, Cradley Heath,