British Gas doesn’t rule out further price hikes as profits drop
British Gas, who had 4.3million customers on Standard Variable Tariffs (SVTs) at the start of the year, has been actively encouraging consumers to switch onto cheaper, fixed rates ahead of the SVT price cap coming into force. However, the existing 3.5 customers still on SVTs could see their energy prices rise once again, with profits reportedly dropping by 16% in the first half of 2018.
The energy giant increased tariffs by 5.5% earlier this year, in response to climbing wholesale costs, the expense of rolling out smart meters and the introduction of a price cap on pre-payment meters, with a cap on SVTs due to come into effect in December.
Parent company Centrica said:
“Energy prices continue to rise since we announced our price rise in April and a number of competitors have since increased prices. We are keeping the movement of wholesale energy prices and their impact on our cost of supply under review”.
The first half of the year has seen British Gas lose 340,000 accounts, representing approximately 270,000 customers.
These customer losses imply that more and more consumers are shopping around for cheaper energy tariffs, with 80 suppliers currently in the market for domestic customers. We previously reported that over half a million customers switched electricity supplier in May alone, a 13% increase from May 2017.