Recent data reveals a surge in UK energy costs, simultaneously met by a considerable rise in energy providers’ earnings. British Gas, for instance, has seen a striking profit gain of over 20% even as average citizens grapple with escalating energy charges. In just the initial part of 2012, domestic energy expenditures swelled by up to £90.
By the end of June, British Gas’s revenue had increased by £64m. Moreover, the corporation warns of more incoming price hikes. It explained that the past year has witnessed a climb in wholesale gas costs by about 15%. Coupling that with distribution expenses and government levies, inhabitants could face another £50 surge in their energy bills shortly. The combined cost elevation could result in households paying an additional £100 or more on their energy bills over the subsequent year.
While British Gas contends that its average bills are a reflection of the cost of wholesale gas, detractors dispute this claim. They accuse the company of prematurely implementing price hikes, even as the rise in wholesale prices is gradual. Some argue that while wholesale gas prices have begun to fall, energy firms are hesitant at best to reduce their rates correspondingly. It seems common sentiment that energy firms are quick to increase rates in response to rising wholesale costs, but slow in bringing down prices when those costs decrease.
On average, UK households spend around £1,252 annually on energy, which amounts to over 10% of most couples’ household earnings. The ever-increasing energy costs have put energy at the top of consumer concerns. Almost one-third of UK residents assert that energy is becoming unaffordable. Whilst there has been a slight increase in incomes over the years, the consensus is that the energy hikes continue to be burdensome.
In 2004, the mean energy spending for UK households was around £522 annually. Fast forward to today, that figure has soared to more than £1,252 for many households. Nonetheless, energy firms are unfazed by the current and upcoming hikes. They uphold that the increases are a byproduct of rising wholesale gas prices, even when those prices are on a decline.
Article by Businesselectric.
