The company, owned by Centrica, left its gas prices unchanged, which means the average annual dual fuel bill will rise by 7.3%, or £76, to £1,120. The increase, which takes effect on 15 September, will affect 3.1 million customers. The company said it would give a £76 credit to more than 200,000 vulnerable customers to protect them from the increase.
Ministers expressed concern about the rise, which they said should not be blamed on government policy, and said they were not ruling out future steps to “increase fairness for customers”.
A spokesperson for the Department for Business, Energy and Industrial Strategy (BEIS) said: “Energy firms should treat all their customers fairly and we’re concerned this price rise will hit many people already on poor-value tariffs.
“We are not ruling anything out – whether it is action by the regulator or legislation – to increase fairness for customers.”
Shadow energy minister Alan Whitehead called it a “whopping rise” and said the government should take further action.
“There was an agreement coming into the election that there should be a price cap operating across the market and action should be taken on the standard variable tariffs that so many customers are on. Unfortunately the government has changed their minds about that now and we want to press them to change their minds,” the Labour MP told BBC Radio 4’s Today programme on Tuesday.
The chief executive of Citizens Advice, Gillian Guy, said: “British Gas has in recent years been offering one of the less expensive standard variable tariffs from a larger firm, but today’s price rise will close this gap and hit longstanding customers hardest. This price rise has been issued despite costs for energy firms dropping in recent months.”