Recent data shows that energy costs in the UK have skyrocketed, at the same time energy providers’ profits have soared. Take British Gas, for example; they’ve reported a remarkable profit increase of over 20%, all while the average person struggles with higher energy bills. In the first part of 2012 alone, household energy costs went up by as much as £90.
By the end of June, British Gas’s revenue had jumped by £64 million, and they’ve already warned that more price increases are on the way. They said that wholesale gas prices rose by around 15% in the past year. When you add in distribution costs and government levies, it’s possible that people could see another £50 added to their energy bills soon. The combined increase could mean households paying an extra £100 or more on their energy bills over the next year.
British Gas says their average bills reflect the cost of wholesale gas, but critics don’t buy it. They argue that the company is raising prices too quickly, even as the rise in wholesale prices is slower. Some people point out that while wholesale gas prices have started to fall, energy companies are hesitant to lower their rates. It seems like energy firms are always quick to hike prices when wholesale costs go up, but slow to reduce them when those costs go down.
On average, UK households spend about £1,252 a year on energy, which is more than 10% of most couples’ household income. These rising energy costs are now a major worry for consumers. Almost a third of UK residents say energy is becoming too expensive. Even though incomes have slightly increased over the years, energy price hikes are still a heavy burden.
Back in 2004, the average UK household spent around £522 annually on energy. Today, that figure has more than doubled to over £1,252 for many households. Yet, energy companies seem unconcerned about the current and upcoming price hikes. They insist that the increases are due to rising wholesale gas prices, even when those prices are actually going down.