MONEY COMMENT
British Gas Hikes Energy Prices Again!

By Cliff D'Arcy
December 9, 2003

During the winter months, our gas and electricity bills always rocket, thanks to fewer daylight hours and much colder weather. Unfortunately, British Gas has given its energy customers an unwelcome early Christmas present this year, by announcing that it is to raise its prices by around 6%!

These price rises have come in response to rising wholesale gas prices, which British Gas claims have risen 15% over the past year. BG predicts further increases in wholesale prices next year, so you should brace yourself for more price hikes to come.

Here are the details: 12½ million gas and electricity customers will see their bills rise 5.9% from 10 January 2004. Also, from 1 March 2004, tariffs will rise for a further 2½ million customers who have pre-payment contracts. There's no escape north of the border: Scottish Gas customers will also be hit by these rises.

So, if your annual bill from BG comes to £500 a year, it's going to go up by almost £30 next year. And remember, that's not just for 2004, it's every year from next January onwards!

It's clear that British Gas is getting a taste for hiking its energy prices: this is its third price increase in two years. Before yesterday's announcement, Britain's biggest domestic energy supplier had already raised gas prices by 7.3% over the previous two years, and electricity rates by 2.5% eight months ago.

However, this will be only the thin end of the wedge. Other energy suppliers generally follow BG's lead, so you should expect a round of price hikes over the coming months. In fact, major supplier Powergen jumped the gun by announcing its price rises last month: almost 7% for gas and 5% for electricity customers, with effect from 5 January 2004 for existing customers. What's more, when Powergen took over rival Amerada, it raised prices by 15% in some areas. Another supplier, Basic Power, recently raised its prices by a whopping 9%!

So, the joke's on loyal British Gas customers: almost three-quarters have never moved, despite the fact that it is the most expensive gas supplier. Indeed, independent price-comparison service and Fool Partner uSwitch.com reckons that UK households could save a massive £2.2 billion a year by switching to cheaper energy suppliers!

It's so easy to see the savings: simply visit uSwitch.com and enter your postcode and a few details about your energy usage. uSwitch.com is a free, impartial, energywatch-accredited service that allows you to compare the up-to-date tariffs of all the suppliers in your area, and even switch online with minimal fuss.

So, if you want to escape this spiral of rising energy prices, shop around for the best deal based on your own individual circumstances. If you haven't switched before - and around two out of three households haven't - you're missing out on a typical saving of around £140 a year, every year. I've switched twice in recent years, with a saving of around £450 to date!

More: How To Resolve Billing Problems | Switch Your Fuel For Great Savings | Summertime... And Your Gas Bill Is Rising | Slash Your Household Bills.