British Gas Announces Price Increase

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."

Fuel Poverty Statistics Revealed

Statistics from the Department of Energy and Climate Change (DECC) have been published, revealing that fuel poverty in the UK has risen by more than 20%.

In 2009, there were around 5.5 million fuel-poor households in the UK, up from 4.5 million in 2008. In England, there were around 4 million fuel-poor households, up from 3.3 million in 2008.

The increase in fuel poverty between 2008 and 2009 was largely due to rising prices. Gas prices rose by 14% and electricity prices by 5 % between 2008 and 2009.

DECC says rising incomes, improvements in the energy efficiency of housing and social and discounted tariffs continue to help some households from falling into fuel poverty.

Fuel poverty among vulnerable households, defined as the elderly, children or somebody who is disabled or long-term sick, for 2009 stood at 4.5 million UK households, up 0.75 million from 2008, and 3.2 million households (England), up 0.5 million from 2008.

DECC's projections for England indicate there are likely to be around 4 million fuel-poor households in 2010 and 4.1 million households in 2011. Although some price rises will impact on households in the latter half of 2011, it will be 2012 before the full impact of these are visible in the fuel poverty data.

A spokesperson for DECC said: "Actual fuel poverty figures for 2010 and 2011 will only be known when we have detailed results of the surveys on household income and efficiency programmes, and will be available for publication in 2011 and 2012 respectively."