British Gas has become the fourth “big six” supplier to announce it is to raise the cost of its standard variable tariff to match Ofgem’s price cap.
The 10% price hike from April 1 will affect around four million British Gas customers who will see their bills rise to an average £1,254 to meet the regulator’s latest cap.
Prepayment meter customers will also face a £107 (9%) price rise.
Ofgem announced on February 7 that it would increase the price cap for default and standard variable gas and electricity tariffs by £117 to £1,254 a year from April 1 due to hikes in wholesale costs.
The watchdog said previously that those affected would still pay a “fair price” for their energy as the increase reflects a genuine rise in underlying wholesale costs, rather than provider profiteering.
British Gas declined to comment specifically on its latest price rise but referred to a statement in January when it said it intended to adjust its standard variable tariff and default tariff pricing to broadly reflect Ofgem’s cap.
British Gas follows E.ON, EDF and npower, who all announced last week that they would be raising their prices to match the cap.
Richard Neudegg, head of regulation at uSwitch.com, said: “British Gas’ confirmation that it is hiking bills up to the maximum permitted by the price cap should surprise no one, but that doesn’t mean their customers should fall for the price cap trap.
“Eight million households already know they’ll be part of possibly the largest energy price rise ever to happen on a single day when the new cap kicks in on 1 April.
“With more suppliers expected to raise their prices to the new cap, over half the energy customers in Britain could affected.
“But they have a chance to escape being part of the grim statistics, instead they can save hundreds of pounds by switching away.”
“Nine in 10 energy deals available today are cheaper than the new cap will be. Now is the time for energy customers to grab one of those cheap deals and find themselves up to £324(5) a year better off.”
Stephen Murray, energy spokesman at MoneySuperMarket, said: “Ofgem opened the door to supplier price rises earlier this month and now the big six are kicking it down.
“For E.ON, EDF and npower last week, now read British Gas.
“The UK’s biggest energy supplier has the largest number of customers on standard variable tariffs and today’s announcement means it is instantly adding a cumulative £409 million to those customers’ bills.”
Alex Neill, managing director of home services at consumer group Which?, said: “The energy price cap will be cold comfort for the millions of British Gas customers who will now face eye-watering price hikes in April.
“This is the fourth price increase announcement in quick succession with the rest of the big six expected to follow suit.
“While there are fewer cheap deals on the market than a year ago, energy customers can still save almost £300 a year by switching to secure a better deal before the April hike.”