British Gas to Raise Prices; Upgrade National Grid
Major UK supplier British Gas has confirmed today that it will raise prices to its domestic customers by an average of 6 per cent, beginning from the 16th of November.
Centrica, British Gas's parent company, blamed the need for the increase on rising wholesale prices as well as a need to upgrade the national grid,and also to allow the company to enact government policies for a "clean, energy-efficient" Europe. Wholesale prices were affected by diminishing gas supplies in the North Sea, British Gas Managing Director Phil Bentley said and an increasingly competitive market.
"We simply cannot ignore the rising costs that are largely outside our control, but which make up most of the bill," he said.
"Britain’s North Sea gas supplies are running out, and British Gas has to pay the going rate for gas in a competitive global marketplace. Furthermore, the investment needed to maintain and upgrade the national grid to deliver energy to our customers’ homes, and the costs of the government’s policies for a clean, energy efficient Britain are all going up."
Centrica says that the average 6 per cent increase will see the average customer's fuel and electricity bill rise by about £80, an increase of £1.50 per week.
Though the company says it has done what it can to reduce costs and mitigate the need for a price increase, the increase was unavoidable due the rising external costs to the company .
"Even after this increase, our margins after tax in 2012 will only be 5p in the pound – a similar level to last year and lower than the prior year," Mr. Bentley said.
"Unfortunately, we cannot run our business sustainably on lower margins and still make the investments in jobs and future energy sources that Britain needs, especially if the country is to grow its way out of recession."