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Centrica plc is an integrated energy company operating predominately in United Kingdom and North America. In the United Kingdom, it operates three segments: upstream, downstream and storage.
British Gas blames government’s clean energy push for price hike
October 12 2012, 9:12am
British Gas revealed costs to deliver the government’s policies for a clean, energy efficient Britain were behind its decision to raise gas and electricity prices in the UK.
Parent company Centrica (LON:CNA) today confirmed the 6% price hike, which will see around £80 a year added to the average domestic energy bill.
British Gas said the government push, together with an upgrade to the national grid, has already added around £50 to the cost of supplying the average customer’s home this year and is expected to add an extra £60 to this cost next year.
It also said the price it is paying for gas is rising as North Sea gas supplies are running out.
Prices in the wholesale market for gas this winter are around 13% higher than those paid last year, it said.
“We know that household budgets are under pressure and this £1.50 per week rise will be unwelcome,” said British Gas’ managing director Phil Bentley.
“However, we simply cannot ignore the rising costs that are largely outside our control, but which make up most of the bill.
“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.”
He insisted the company cannot be run sustainably on lower margins and still invest in jobs and future energy sources.
In a bid to win over its customers, British Gas is offering free loft and wall cavity insulation, while a helping hand will be given to the elderly and those most in need in the form of a £130 credit on their annual electricity bill.
The company said existing customers will be protected against future price increases by a new tariff called ‘Fix and Fall November 2013.
It will mean fixed prices for a year and also guarantees customers’ prices will fall in line with any standard price drop.
