A total of 2.3 million British Gas customers will see their energy bills rise by £97 per year from April.
British Gas is the first big energy supplier in the UK to confirm a rise in bill prices, less than a fortnight after industry regulator Ofgem announced it would increase the energy price cap by £96.
Who is affected by the increase?
If your household energy supplier is British Gas, and you are currently on the average standard default tariff, then you will see an increase in price. The increase will be from £1,041 to £1,138.
Ofgem’s price increase also includes a £23 hike to help suppliers such as British Gas claim back the cash they have missed out on because of unpaid bills during the coronavirus pandemic.
For customers paying their energy bill through a prepayment meter, the price cap is rising by £87 from £1,070 to £1,156.
Prepayment meter customers have to pay a fee to change their meter for a standard one if they want to take advantage of the best deals. Renters will have to get permission from their landlords first.
What is the Ofgem price cap?
Ofgem is the government regulator for gas and electricity markets in the UK.
The regulator sets a price cap twice a year to limit how much suppliers can charge customers on standard variable tariffs, depending on wholesale prices.
Ofgem is increasing the current price cap from £1,042 per year to £1,138 for the six month period from 1 April.
A surge in global energy commodity prices has raised the cost of sourcing gas from the wholesale market, leading to an increase in the cap.