Centrica PLC (LON:CNA) unit British Gas has hiked its Standard Variable Tariff (SVT) for existing customers from October 1 by 3.8%, taking the average bill for a typical dual-fuel customer to £1,205 per annum, an increase of £44.
The FTSE 100-listed firm said it actively wants its customers to choose alternatives to the SVT - which was withdrawn for all new customers on 31 March – saying they should consider British Gas’s fixed-term deals.
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The group said they expect to have only 3mln customers on the SVT by the end of the year, down from 4.3mln at the start of 2018.
It added that it contacted the 3.5mln customers who are affected by the increase, and said 2.4mln British Gas customers on fixed price products will be unaffected.
Centrica said the price increase reflects an approximately 20% rise in the costs of buying wholesale energy since April when it last announced an increase in the SVT.
"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."
Mark Hodges, chief executive of Centrica Consumer said: “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.”