You’ve probably seen the 12.5% price increase from British Gas in the news this week.
This rise is despite the cost of wholesale electricity having fallen 21 per cent since 2014. British Gas blames the price hike on the fact that “government mandates and policy” costs have risen by 104 per cent and the cost of transmission, distribution and metering by 10 per cent.
The strange thing is that British Gas are already more expensive that the majority of suppliers; yet they are increasing their prices while some smaller suppliers, such as Bulb, have recently decreased theirs.
Larger companies usually have economies of scale to help them reduce costs and undercut their smaller rivals. However, at Switchd, this is not what we see in the energy market. Currently, the cheapest energy tariffs are nearly always with the smaller suppliers so that’s who we switch our customers to.
One area of cost that is felt more by the big 6 than by the smaller energy suppliers is the smart meter roll-out. However, this doesn’t go the whole way to explaining the price rise. Perhaps the reason is to be found in the continuation of large profits?
During 2016, over 400,000 customers switched from British Gas to other suppliers. This latest price rise could be yet another reason for customers to switch as they look for cheaper energy deals elsewhere.
At Switchd we make sure you’re always on the best energy deal so that you don’t have to. Join us and you won’t have to worry about any future price rises because we’ll do it for you!