Azara Blog: British Gas prices set to soar

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Date published: 2006/02/05

The BBC says:

Reports that British Gas is to increase its prices by up to 25% have angered consumer groups and some charities.

British Gas said it is planning to increase rates but said the exact figure had not yet been decided.

Age Concern said: "Rising fuel costs mean older people on fixed incomes will struggle more than ever to keep warm, which could mean even more deaths."

However, energy regulator Ofgem said that UK customers currently had "the lowest gas prices in Europe".

Gordon Lishman, director-general of Age Concern, said: "Many pensioners live on a low, fixed income and are hit particularly hard by hikes in their fuel bills.

"More than 28,000 people over 65 died from cold related illness last winter, when temperatures were warmer than they have been this year."

A spokesman for Centrica, the parent company of British Gas, said: "Wholesale gas prices for 2006 are up about 75% on 2005.

"Clearly all suppliers are buying their gas in the same market, therefore we would expect that suppliers will be increasing their tariffs substantially as we go through 2006.

"But we haven't said anything about timing or scale of an increase."

It's totally obvious such an increase is due. And these kind of price increases are going to do much more to reduce energy consumption in the world than almost anything government could do (because government, when it is run well, is almost a zero-sum game). And consumers should also be paying a carbon tax on gas, which would increase prices futher, but funnily enough nobody (not even the so-called environmentalists) ever mentions this. The question of how much energy subsidy to give certain sectors of the community, e.g. pensioners, is a completely orthogonal issue.

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