British Gas could lose a million customers in a year
8th May 2017 | Residential Energy
Centrica, owner of British Gas, has warned that the proposed Tory energy price cap could push up prices. It says that evidence from other countries suggest price caps cut competition and choice, and can lead to higher average prices. British Gas has haemorrhaged customers at a rate which would see it lose a million by the end of the year. This is despite British Gas being the only one of the Big Six energy supplier not to put up its tariffs this winter: it still lost 261,000 customers to competitors in the first quarter of 2017.
The fall comes on top of the 400,000 customers British Gas lost last year. This took it to below 14 million residential customers for the first time since the 1970s.
British Gas losing customers
Mark Todd, co-founder of switching site Energyhelpline, said the supplier was shedding customers because its prices were not competitive enough. “British Gas have kept their standard prices much lower than the rest of the big six but even so this has still seen them lose quarter of a million customers in the first three months of trading – ultimately because there are much cheaper tariffs available for switchers.”
He predicted that in June the company would announce a 5-10% increase in its standard variable tariff that would affect millions in August. Centrica said the homes it supplies in the US and UK had used less energy than normal because of above average temperatures this year. The company said it had taken a financial hit from wholesale prices falling since its preliminary results in February. Its North Sea gas storage plant has also been closed temporarily over safety concerns.
Lazarus Research found gross profit margins across the sector were the highest on record, which it said would “provide ammunition to the government on why a cap is needed.”
“Centrica does not believe in any form of price regulation. Evidence from other countries would suggest this will lead to reduced competition and choice, and potentially higher average prices,” the company said.
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