British Gas to hike energy bills by 5.5%

British Gas will bump up prices for customers on its standard variable tariff by 5.5% from next month.

The price increase, which kicks in on 29 May, will see the average annual dual fuel bill rise by £60 to £1,161.

Owner Centrica attributed the price hike to rising wholesale and policy costs, adding that similar pressures were cited by Ofgem when they increased the pre-payment meter cap by just over £57 on 1 April.

The changes are set to hit 4.1m customers on the SVT tariff, while 3.7m will be unaffected, including those currently on fixed-term contracts, prepayment meters and any customers deemed vulnerable.

Mark Hodges, chief executive of Centrica Consumer, said: "We fully understand that any price increase adds extra pressure on customers' household bills. This increase we are announcing today is reflective of the costs we are seeing which are beyond our control.

"We continue to work hard to reduce our own costs and keep our prices as low as possible. We have seen other suppliers raise prices and Ofgem increase the level of the prepayment tariff cap largely due to increasing wholesale energy and Government policy costs. Government policies, intended to transform the energy system, are important but they are putting pressure on customers' bills. We believe government should level the playing field so the customers of all suppliers pay a fair share of energy policy costs. We continue to encourage government to consider moving these costs out of energy bills altogether and into general taxation."

Centrica announced last November that it was ending its SVT for new customers and offering a choice of fixed-term competitive tariffs to encourage customers to choose the best deal for them.