British Gas mulls 15% price rise

alared

http://news.bbc.co.uk/1/hi/business/4618409.stm

April2

At the same time they give a profits warning and blame loss of customers!

Perhaps someone should explain to them how the market economy works (high prices=less customers, low prices=more customers) and, if they're serious about a further 15% rise after more than 17% last year, the tale of the camel and the straw.

Cardew

The trouble is that all the other suppliers do exactly the same.

Cagey

Agree april. Will they never learn that raising prices loses customers. The strage thing is , theirs was about the only shares price to rise on Friday.

You are right Cardew . Where one goes the others follow but BG are the first to say it & they will lose most of the customers.

Nicholas

Cagey wrote:

Where one goes the others follow but BG are the first to say it & they will lose most of the customers.

Do you think that is the idea in the short term? I read somewhere on these forums that BG and the regional electricity companies have to lose 50% of their customers before they can become competative.

Cagey

Strange one that & news to me. Can`t see it somehow.

Cardew

Nicholas wrote:

Do you think that is the idea in the short term? I read somewhere on these forums that BG and the regional electricity companies have to lose 50% of their customers before they can become competative.

I understand that is the case for BG with their gas accounts - part of the conditions when they lost their monopoly. Otherwise they would have artificially lowered their prices(at the beginning) to prevent other firms from getting any custom. It doesn't apply to their electricity accounts though.

The same conditions apply to Electricity companies for electricity but not gas.

That is why BG gas prices are high but their electricity prices, whilst not the lowest, are reasonably competitive.

Nicholas

Cardew wrote:

I understand that is the case for BG with their gas accounts - part of the conditions when they lost their monopoly. Otherwise they would have artificially lowered their prices(at the beginning) to prevent other firms from getting any custom. It doesn't apply to their electricity accounts though.

The same conditions apply to Electricity companies for electricity but not gas.

That is why BG gas prices are high but their electricity prices, whilst not the lowest, are reasonably competitive.

Sorry, that is what I meant:o

rosscobley

Nicholas wrote:

Do you think that is the idea in the short term? I read somewhere on these forums that BG and the regional electricity companies have to lose 50% of their customers before they can become competative.

No this is not ture. when the market was dereglated around 1998 bgas and pes area elec supplys had to stay the highest priced. a few years ago i was told that that rule has been dropped but because they make so much money out of the customers who stay with them they dont bother dropping the prices as they will then start to lose money

yollom

British Gas are now allowed to offer competitive prices - however because gas is a commodity traded on a daily basis similar to oil we are currently experiencing astronomically high raw gas prices - as an example on 29/06/05 winter 2005 gas was trading at 2.83p/kWh - this is the RAW cost of gas before addition of transportation, metering & supplier on-cost

I imagine your gas price at home is considerably lower then this? Upto now most suppliers have not passed on theses increases to the domestic market but the way things are looking I shoudl expect further hefty increases by ALL domestic suppliers towards winter