British gas owner Centrica will increase the price of electricity by 12.5 per cent from mid September

 
Lucy White
British Gas Controversially Increases Its Energy Prices
The company has announced gas prices will remain the same (Source: Getty)

Overshadowing its interim results, British Gas owner Centrica has today announced that it will increase the price of electricity by 12.5 per cent from mid September.

It has said gas prices will remain at their current level, but the average annual dual fuel bill for a typical household on standard tariff will rise by £76 to £1120 – an increase of 7.3 per cent.

Read more: British Gas is planning to hit millions of customers with increased energy prices

"British Gas hasn’t had a price rise for nearly four years. In fact we’ve been reducing prices. It’s been a very difficult decision to make but the costs of providing electricity are rising," said Mark Hodges, chief executive of Centrica Consumer.

Customers on fixed term deals will not be affected. Centrica has also claimed it will be protecting vulnerable customers, since the core group who automatically receive the Warm Home Discount will receive credit in their account of £76 over the winter months.

“British Gas customers should take matters into their hands and switch today to a fixed rate tariff with a 'Big Six' or other reputable supplier. It’s hassle free, takes five minutes on a comparison site and you can save £300 or even more," said MoneySuperMarket energy expert Stephen Murray.

Centrica has been working on a £750m "cost efficiency programme", which has seen it sell off several assets over recent months.

Read more: British Gas owner Centrica has flogged two gas power plants to a Czech firm for £318m

The programme is "ahead of schedule", according to the company, as it completed or announced more than £800m-worth of central power generation and exploration and production disposals in the first half of 2017.

The announcement was made alongside a lacklustre set of results from Centrica, which showed customer-facing businesses’ adjusted operating profit was flat in the first half of 2017 compared to the same period in 2016. Higher profit in Centrica Business offset reduced profit in Centrica Consumer.

Adjusted earnings were down 11 per cent to £449m including a higher net interest cost, although earnings before interest, tax, depreciation and amortisation (Ebitda) were up two per cent.

The interim dividend was 3.6p, 30 per cent of the 2016 full year dividend "in line with established practice".

Read more: Barclays and Centrica among the firms braced for shareholder storms at annual general meetings

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