British Gas launches campaign after price hike

British Gas has announced an energy bill price hike for customers, which is likely to spark a slew of price-led marketing campaigns from competitors before they too raise their own charges.

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The energy supplier has today (12 October) written to customers informing them that domestic gas and energy prices will rise by an average 6 per cent on 16 November 2012 – the equivalent of about £80 extra a year.

It has also launched a one-year fixed price tariff, which will keep customers’ bills at the new levels, but will also guarantee that should standard prices fall, customers’ bills will drop by the same amount.

Marketing activity for the “Fix and Fall” tariff will commence 13 October and will run for a five week period. Activity will include TV, radio, print and outdoor.

Communications about the price rise will also point customers towards its free loft and cavity wall insulation service and its “Warm Home Discount”, which offers a £130 credit on annual electricity bills for those who are elderly or most in need.

Phil Bentley, managing director of British Gas, says the price increase is due to North Sea gas supplies running out, meaning it needs to rely on global supplies, and the investment needed to maintain the national grid.

He adds: “We know that household budgets are under pressure and this £1.50 per week rise will be unwelcome. However, we simply cannot ignore the rising costs that are largely outside our control, but which make up most of the bill.”

The move makes British Gas the second of the UK’s largest energy providers to raise its prices after SSE announced it was to increase its tariffs by 9 per cent on average next week. Today (12 October) Npower announced it too is to raise its prices by an average 9 per cent, just hours after the British Gas news emerged this morning.

Of the other providers only E.On has pledged not to raise prices this year.

British Gas last announced a price rise in July last year, which hit customers in August 2011. At the time, gas prices went up by 18 per cent and electricity bills 16 per cent.

The move prompted rival provider EDF Energy to launch a press campaign inviting consumers to “relax” and fix their energy prices by switching to its services.

All the big six energy providers raised their energy prices last year, but then launched major marketing campaigns in January to launch their price drops – although these cuts did not mitigate the cost of the earlier hikes to customers.

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