Centrica PLC British Gas Standard Variable Tariff to increase (1769X)
August 08 2018 - 3:30AM
UK Regulatory
TIDMCNA
RNS Number : 1769X
Centrica PLC
08 August 2018
8 August 2018
Centrica plc ('the Company')
British Gas Standard Variable Tariff to increase due to rising
wholesale costs
-- The British Gas Standard Variable Tariff (SVT), which was
withdrawn for all new customers on 31 March, will increase for
existing customers on 1 October by 3.8%.
-- This takes the average bill for a typical dual fuel customer
to GBP1205, just below the average of the SVTs for the larger
energy suppliers, and represents an increase of GBP44.
-- We are increasing our prices because of an approximately 20%
rise in the costs of buying wholesale energy since April, as Ofgem
cited when they announced an increase in the level of the
prepayment meter cap on 7 August.
-- We will contact 3.5m customers who are affected so they know
how their prices will change and let them know about our
alternative fixed-term offers.
-- 2.4 million customers on fixed price products will be unaffected by this price increase.
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 GBP1180 for a typical dual fuel customer from 1 October,
GBP25 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."
ENDS
ENQUIRIES
Investors and analysts +44 (0)1753 494900 ir@centrica.com
Media +44 (0)1784 843000 media@centrica.com
Centrica plc is listed on the London Stock Exchange (CNA)
Registered Office: Millstream, Maidenhead Road, Windsor,
Berkshire SL4 5GD
Registered in England & Wales number: 3033654
Legal Entity Identifier number: E26EDV109X6EEPBKVH76
ISIN number: GB00B033F229
Notes to Editors
1. Larger Suppliers Standard Variable Tariffs
Elec
Supplier Gas (GBP) (GBP) Dual Fuel (GBP)
OVO Energy 547 603 1150
BG SVT until 1 October 580 582 1161
Utility Warehouse 584 617 1175
BG Temporary October
2019 588 592 1180
SSE 578 618 1196
First Utility 538 661 1199
BG SVT from 1 October 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 GBP/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 GBP47 from GBP1089
to GBP1136. 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.
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END
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