UK Energy Prices Rise While Energy Suppliers Record Massive Profits

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Reports show that while energy prices have risen in the UK recently, energy suppliers are seeing major profits. Profits at British Gas rose by more than 20 percent while Britain’s residents were facing extremely high energy bills. Household energy bills rose by as much as £90 in just the first few months of 2012.

British Gas has seen an increase in revenue of £64m by the end of June. The company has warned that there are more increases coming in the future. They stated that wholesale gas prices have risen by as much as 15 percent over the past year and when combined with distribution costs and government levies, this could cause another £50 increase to household energy bills in the very near future. The cost increases combined could cause households to see upwards of £100 added to their energy bills over the next year or so.

British Gas claims that their average bills are determined by the cost of wholesale gas. Critics of the company argue this point and say that they simply jump the gun in raising costs even while wholesale price increases are slow. Some say that wholesale gas prices are now falling but energy companies are reluctant at best to lower their rates as well. Many claim that energy companies will quickly raise rates when wholesale gas rates increase but take their time in lowering rates when those wholesale rates drop.

The average UK household spends around £1,252 for energy which accounts for more than 10 percent of most couples’ household income. Energy is at the top of every consumer’s worry list with rises seeming to come entirely too regularly. Nearly one-third of all UK residents claim that energy is simply no longer affordable and while incomes have increased a bit over the years, most consumers feel that energy increases are still too much to bear.

Just a few years ago in 2004, UK households were spending around £522 per year on average for energy. Today however, those numbers have jumped drastically to over £1,252 per year for most households. Energy companies on the other hand are not complaining about the recent and future increases. They insist that rising wholesale gas prices are causing the increases even when those wholesale prices are going down.

This article was written by Businesselectric.