“the playing field is tilted against us at the moment”
- Iain Conn (CEO, Centrica)
It's a common complaint from the big suppliers:
They are disadvantaged by the social obligations they carry that don't apply to smaller suppliers.
They carry the burden of these costs, and they have no option but to pass on to their customers in the form of bigger energy bills.
Let's take a closer look.
For Octopus, our standard variable tariff is currently about £121 cheaper than British Gas. That's £923 vs £1044 for a medium user.
Is this difference down to obligations?
Of course it's not.
We've done the maths, and it's built into our business model.
The obligations for us would be about £40 per customer. So even if we were obligated, and passed all of that on to our customers, we'd still be £81 cheaper than British Gas.
And let's face it. Energy prices are changing.
A "price freeze until August" is simply a way of announcing a price rise in September.
If British Gas announce a similar rise to what we've seen from the other Big 6 suppliers, they'll be at something like £1120 per year - about £200 more than Octopus, and £160 more than Octopus would be if we were obligated.
The simple truth is that British Gas are more expensive because they are not as efficient, and make higher profits.
As one Big 6 consultant put it to us:
"If you have a massive customer base, and find you can keep putting your prices up? Well, you would, wouldn't you?"
Now, it would stand to reason that with a more expensive product, the service a customer could expect would be better.
And once again, this is just not the case.
It's the smaller suppliers that are delivering better service - justcheck Trustpilot where we, and other new suppliers, are rated over 9/10 by real customers, whilst the Big 6 languish at 5/10 and lower (all the way down to 0.2/10!)
And we're more sustainable too. Leading the way in solar energy, as well as clean energy produced from vegetable matter.
So if Iain really wants to understand why we're cheaper – and what real customer service looks like – we're inviting him to visit us, to talk to our team, and see what best practice in energy looks like in 2017.
FAQs
The simple truth is that British Gas are more expensive because they are not as efficient, and make higher profits.
Why are UK gas prices so high? ›
Increased demand in other countries
This increased demand has meant the UK cannot access the same supplies of LNG as it needs to keep prices down. This combination of problems has increased the demand for gas worldwide, ramping up the pressures on gas exporters and driving up the cost of gas.
Why is UK gas more expensive than us? ›
Why is oil more expensive in the UK than US? Tax. Oil and its by-products are taxed heavily in the UK, particularly petrol (gasoline). At the current retail price for petrol of about £1/litre, £0.78 of that is tax.
Why is gas so expensive in London? ›
Analysts say the spike is due to three major factors- tensions in the Middle East, the recent carbon tax increase, and a switch-over from the winter to the summer gas blend.
Who is better than British Gas? ›
Who is better than British Gas?
| Supplier Name | Trustpilot Score | CitizensAdvice |
|---|
| British Gas | 4.0 | 1.8 |
| Octopus Energy | 4.8 | 2.7 |
| OVO | 4.3 | 2.5 |
| E.ON Next | 4.2 | 2.5 |
1 more rowThe energy crisis has been driven by wholesale gas price surges and the inefficiency of much of the UK's housing stock. This has seen the number of UK households in fuel poverty rise to 6 million as of April 2024, and has helped drive the inflation causing the cost-of-living crisis.
Why has my electricity bill doubled in the UK? ›
If your last bill was larger than expected there may be a reason: your energy supplier (the company sending the bills) has increased the cost of its electricity. your usage has risen, for example due to cold weather. your bill is based on an actual meter reading, rather than an estimated reading.
Why is USA gas so cheap? ›
While the US is a leading producer of crude, it still imports much of its stock from other countries. The discrepancy didn't come from the price of the gasoline itself, but mostly from the taxes paid on the gas. In the US, gas taxes have always been shockingly low.
Why is gas getting cheaper in the US? ›
Global prices on steady decline due to higher production
Gas prices are also down globally because of an increase in gas production despite a lower demand. OPEC+ has announced that it will cut oil supply during the first quarter of 2024 to support oil prices.
Why is US natural gas so cheap? ›
High natural gas production, low natural gas consumption, and higher natural gas inventories than the previous five-year (2018–22) average contributed to prices declining for much of 2023 and the first two months of 2024.
Petrol prices in the UK are 42% higher than the global average, costing on average £85 for a full tank. The average petrol price in the UK is also 86% higher than in the US, costing £85 to fill up a tank compared to just £46 in the US.
Where does London get their gas from? ›
You may be surprised to learn that the UK currently sources around 50% of its natural gas from its own territory, with the North Sea accounting for an estimated 50%. The remaining 50% of UK gas supplies are imported from various different countries around the world, including Norway, the United States and Russia.
What is the price of a gallon of gas in London? ›
Company Matches
| Nation | City | Price in USD Regular/Gallon |
|---|
| United Kingdom | London | $5.79 |
| Germany | Frankfurt | $5.57 |
| France | Paris | $5.54 |
| Portugal | Lisbon | $5.35 |
32 more rowsBritish Gas is a subsidiary of Centrica.
Who owns British Gas? ›
British Gas business is part of Centrica Business Solutions . Our parent company is Centrica plc , a global energy and services company, dedicated to satisfying the changing needs of our customers.
What company took over British Gas? ›
1997. Centrica plc was formed on 17 February following the demerger of British Gas plc, which was renamed BG plc.
Why are UK gas prices higher than Europe? ›
Professor de Leeuw said: “Compared to our European neighbours, the UK has very limited gas storage capacity (up to 5 days versus up to 90 days in Germany). “This makes the UK more dependent on accessing gas in the short-term markets and therefore more exposed to price volatility.”
Why is gas so expensive in Europe? ›
EUROPE HIT PARTICULARLY HARD BY GAS PRICES
Another reason for higher gasoline or petrol prices in Europe is because the continue generally uses brent crude (BZ=F) as a feedstock, which trades at a premium compared to the U.S.'s benchmark of West Texas Intermediate (CL=F).
Why did gas prices go up after Russia invaded Ukraine? ›
Russia's invasion of Ukraine drove unprecedented turmoil in international gas markets, with supply restrictions, sanctions and sabotage contributing to record wholesale prices and significant volatility.
Is gas expensive in the UK? ›
Average gas bills in the UK
The average gas bill in the UK as of 8 March 2024 is £853.30 per year (without factoring in the annual gas standing charge).
