WHY ENERGY COSTS ARE RISING, by British Gas
Why we had to put our prices up, by British Gas
Following British Gas’ recent price rise, Ian Peters, Managing Director Residential Energy at British Gas tells us he thinks energy costs must rise. We’d like to know what you think. Leave us a comment below.
Last week, we announced that, regrettably, gas and electricity prices for British Gas customers will rise by 6% from 16 November, adding around £80 to the average annual dual fuel bill.
I know this will be unwelcome news, especially with household budgets across the country under pressure. We did not take this decision lightly.
We can’t ignore rising costs which make up most of the bill.
North Sea gas supplies are running out, and we have to pay the going rate for gas in a competitive global marketplace. Prices in the wholesale market for gas this winter are around 13% higher than those paid to secure gas for last winter.
Investment needed to maintain and upgrade the national grid and the costs of the government’s policies for a clean, energy-efficient future are all going up too.
We’ve done all we can to cut our own costs, by doing business differently and more efficiently.
I know people will wonder why British Gas can’t make less profit and absorb the rising costs.
Our profits in the second half of 2012 are expected to be around 15% lower than for the same period of 2011, and our margins after tax in 2012 will still only be 5p in the pound.- the same as 2011, and less than 2010.
It’s important we maintain this margin. Not only are we investing in energy sources needed in the future, but we’re also investing in our customers’ homes to help reduce energy they use and keep their bills under control.
Because we’re helping our customers become more energy efficient, even though prices are going up, bills don’t necessarily have to.
We spend more money than any other energy company on people who need the most help, through energy efficiency measures, account management and payment options – and we have the broadest criteria for the Warm Homes Discount, a credit of £130 on the electricity bills of customers who are elderly and most in need.
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What do you think?
Sound reasonable? Still not happy? Let us know your verdict below