Household Gas Bills To Rise Again This Winter

British Gas owner Centrica has warned that household gas bills are likely to rise again this coming winter.

The UK's biggest energy supplier said wholesale gas prices are 15% higher for next winter than last, and together with other costs this will add £50 to the average bill.

With wholesale prices dependent on global oil costs, the company said the extra charges, which include investments to meet environmental targets, were "largely outside of our control".

British Gas, which has 15.9 million residential customers, dropped its standard electricity tariff by 5% in January - but only after big rises in both gas and electricity bills over the summer.

While other major energy suppliers also reduced their prices this year, it has not been enough to offset price hikes in the autumns of 2010 and 2011.

According to Consumer Focus, electricity prices rose by an average of 16.3% between November 2010 and 2011, compared to an average decrease of 5.5% at the start of 2012.

Over the same periods gas prices rose by 22.9% and fell by 4.9%.

The average UK dual energy bill is now £1,258, compared to £1,110 in January 2011.

Centrica said it was battling with higher costs for transport and distribution, metering, green levies and social costs, as well as the rise in wholesale gas prices.

British Gas made £522m in profits last year despite mild spring and autumn weather.

Centrica as a whole reported a 1% rise in adjusted operating profits for 2011 to £2.41bn.

This year, the energy giant said trading was in line with expectations, with higher wholesale gas and power prices helping to offset the effect of mild weather and energy-saving initiatives in the first quarter.

Cold and wet weather boosted demand in April, increasing average domestic gas consumption in the first four months of the year by 1%, although electricity was down 3%.

Commenting on the latest price warning from Centrica, Audrey Gallacher, director of energy at Consumer Focus, said: "Consumers will need clear evidence that price rises are warranted if they are to stomach further increases to their bills.

"People simply don't know whether what they are asked to pay is fair.

"The perception is that suppliers are quick to pass on high price rises and slow to pass on small price cuts."

The trading update came as Centrica's board came face-to-face with shareholders at the company's annual general meeting in London.

While its pricing and boardroom remuneration report came under scrutiny, only a small minority investors voted against the firm's pay strategy.

But one angry investor told the AGM that paying a bonus to the bosses of Centrica and British Gas was not only "rewarding failure" but also an "insult to common decency".

Barclays, Aviva and Trinity Mirror have all faced protest votes in recent weeks from investors angry that their top pay packages did not match share price performance.

Meanwhile, Co-operative Energy has emerged as the winner of the UK's first 'collective switching' initiative.

Organised by consumer group Which? and campaigners 33 Degrees, the 'Big Switch' was set up to use group buying power to negotiate the cheapest tariffs for gas and electricity bills.

They claim it has the potential to save an average of £123 per household on energy bills.

The first auction was won by year-old supplier Co-operative Energy but rival consumer groups claim cheaper deals may be available.

It was also unclear how many consumers which signed up to the Big Switch would be entitled to move onto to the winning deal.