British Gas has announced it is increasing its domestic tariffs for gas by an average 18%, and for electricity by an average 16%, on 18 August, 2011.The rise is in response to a 30.2% increase in wholesale costs. The energy company attributes the rise to the higher global demand for gas, "driven by increased consumption in Asia and the impact on supply of unrest in the Middle East and North Africa.
British Gas claims it is currently making a loss on the energy it sells, which it says "cannot continue... as it needs to be a profitable business in order to invest in future sources of energy for Britain".
British Gas' managing director, Phil Bentley, explained: "We know there is never a good time to raise prices, but we are buying in a global energy market and have to pay the market rate."
Until August, Bentley is urging current customers not to jump ship just yet. "Our advice to customers is to wait and see what happens in the energy retail market as a whole before making any decisions about switching supplier."