Centrica’s (LON:CNA) British Gas unit has moved to hike its default tariffs, the FTSE 100 group has said. The company has attributed the move to rising wholesale energy and policy costs.
Centrica’s share price has been little changed in today’s session, having given up 0.15 percent to 143.34p as of 10:08 BST. The stock is underperforming the broader London market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.30 percent higher at 7,216.67 points. The group’s shares have lost over a third of their value over the past year, as compared with about a 1.8-percent dip in the Footsie.
British Gas to hike tariffs
Centrica announced in a statement today that the price of the British Gas Standard Variable Tariff (SVT) will increase on May 29 by £60 to £1161, marking an average rise of 5.5 percent for a typical dual fuel customer. The company expects the increase to impact 4.1 million SVT customers, with 3.7 million unaffected including those currently on fixed-term contracts, prepayment meters and vulnerable customers.
The 5.5 percent increase, which applies to both electricity and gas, will mean a typical dual fuel domestic customer on the SVT will pay on average £60 a year more.
Centrica explained that the hike was a result of rising wholesale gas and electricity costs, and the costs of government policies.
“This increase we are announcing today is reflective of the costs we are seeing which are beyond our control,” Mark Hodges, CEO of the FTSE 100 group’s consumer business, explained in the statement.
British Gas’ move comes after Centrica revealed last week that its chief executive Iain Conn had seen his pay package more than halve last year, following the group’s ‘disappointing’ performance.