The company blames the rising wholesale cost of gas, which it says has gone up by 30% since last winter. It buys half its gas on the international wholesale market, and says it has to pay the market rate. British Gas says it had already warned that it was likely to raise prices this year. In May, the company said its customers were not paying enough to reflect the increased cost of gas on the wholesale markets, and that this would depress its profits.
However, Mike O'Connor, the chief executive of Consumer Focus, pointed out that while wholesale costs had gone up, but they were still around a third lower than their 2008 peak and during that time British Gas' prices have risen by around 44% on gas and 21% on electricity. Last year, British Gas' residential business made £740m profit.
In June, Scottish Power was the first of the big-six energy suppliers to announce another set of price increases, with its gas going up by 19% and electricity by 10%. Richard Lloyd, of the consumer association Which?, said the price rises were an unwelcome move, as people are already having to cut back on essentials, and so this could be a cold winter for many. The Energy and Climate Change Secretary, Chris Huhne, said it highlighted the need to change from generating electricity by burning gas and coal, and move to alternatives like renewables and nuclear power.
As far as people's household budgets go, the increase in energy prices will mean cutting back, or shopping around for good value. So it's worth checking out Rewards First, the online membership discount shopping programme. It's a special retail website which offers customers a quick and efficient service when finding savings and discounts. Customers can visit http://www.rewardsfirst.co.uk for top quality high street and online brand names, and online discount codes for over 600 retailers. Each of the 600 merchants has something unique to offer Rewards First shoppers, and their discounts vary from day to day, so it's always worth members checking regularly to see what new savings are available, many of which don't exist anywhere else.
As well as these exclusive offers, Rewards First provides its members with discounts from just about every shopping category imaginable, as well as everything from the top designer brands to some of the best boutique shops. There's high street fashion, clothing, jewellery and accessories through to home, garden and DIY. So there's no need to pay full price or wander round the mall or the high street checking prices, when all of the sales, discounts and savings can be found in one place.
To take advantage of the top offers available and to join the Rewards First programme please visit http://www.rewardsfirst.co.uk
Rewards First is an online membership programme, which gives you access to a suite of discounts offered by 100’s of high street retailers. Rewards First is a membership programme and monthly membership fees are payable after any free promotional period has come to an end.