British Gas pledges to use gain from cold weather to maintain price competitiveness

13th May 2013

Cash strapped British Gas customers may receive some respite from higher bills as the energy giant has pledged to use any benefits from the recent and unseasonal cold snap to keep prices competitive writes Philip Scott.

As a result of the unusual period of extended cold weather, the average residential gas consumption was 18% higher in the first four months of 2013 than in the same period in 2012 and residential electricity consumption was some 3% higher, according to British Gas. In 2012, the firm faced a barrage of criticism for upping its electricity and gas tariffs by 6% or £80, taking its average household bill to £1,340 a year. It subsequently reported an 11% year-on-year increase in profits for its residential arm.

But British Gas’s parent company Centrica, in its interim management statement issued today, said: “Recognising the economic pressures facing many of our customers, the Board has determined that any benefit arising from the exceptionally cold weather will be used to maintain our price competitiveness.  As a result of this decision, we expect the residential energy supply business to deliver an operating profit for the full year in line with expectations, weighted towards the first half.”

Ann Robinson, director of consumer policy atprice comparison website uSwitch says: “This is welcome news when the majority of consumers are struggling to pay their household energy bills. British Gas has recognised the pressure facing customers and is using the financial gain from the extended cold weather to maintain its competitiveness. In plain English, this means that British Gas customers should expect no further increase in prices at least for the foreseeable future.”

But Robinson warns that consumers should not be complacent. She adds: “There is currently over £320 difference between the cheapest and most expensive energy tariffs on the marketand with significant differences creeping in on standing charges it is even more important that consumers shop around the whole market as even greater savings can be made.”

According to uSwitch, the cheapest dual-fuel, combined gas and electricity, deal is currently available from EDF energy, at £1,332 per year, while the most expensive is offered by E.ON at £1,370. The average bill in the UK is £1,353.

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