It's gas mark 9 as energy bills rise to boiling point
Some blame greedy utilities, others Russia, but consumers can contain surging prices
Sunday 08 January 2006
The struggle to keep a lid on rises in your gas bill is reaching boiling point.
On New Year's Day, the price hikes announced by npower and Scottish & Southern Energy (SSE) at the end of last year started kicking in for some 11 million households.
Npower and SSE have turned up the gas thermostat by 13.7 and 13.6 per cent respectively, and both have raised their electricity charges by up to 12 per cent.
These increases will add up to £100 a year to the average customer's fuel bill, according to the price-comparison service Money- supermarket.com.
Meanwhile, Energywatch, the consumer watchdog for the gas and electricity industry, has raised fresh concerns that vulnerable customers - particularly the elderly and those on low incomes - will switch off their heating to save money.
Worse, the gas price rises are unlikely to be the last: neither provider can rule out further hikes in the coming months.
It's the same story at British Gas, Powergen, EDF and Scottish Power, all of which stressed last week that they could be affected by further price rises in wholesale gas. This is the cost of buying their own supply and is likely to be passed on to customers.
Already, all four have introduced gas bill increases of between 10 and 14.2 per cent since August.
Jitters also spread last week over another round of gas hikes for consumers when Russia cut off supplies to Ukraine.
This led to severe supply disruption in Western Europe and, although anxiety about the impact on Britain eased on Wednesday as officials calmed the dispute, the episode underlined how much influence outside events can have on our bills.
With supplies in the North Sea beginning to dwindle, Britain has become a net importer of gas. That leaves us exposed to the risk of supply disruptions such as those that hit the pipelines crossing the Ukraine last week.
When competition for scarce supplies forces up wholesale prices, the consumer pays. And wholesale gas prices doubled in the 12 months to August alone. This explains why customer bills have risen, on average, by nearly a third over the past two years, companies claim.
"There is only so much we can absorb, and a long period of high prices will have to be reflected in household bills," warns an EDF spokesman.
This view is reflected at British Gas. No decision has yet been made to raise charges in 2006, insists a spokeswoman, but last month's trading outlook from Centrica (British Gas's parent company) warned that "consumers will face another year of price increases as all suppliers look to recover higher wholesale costs".
Allan Asher, the chief executive of Energywatch, warns that 2006 will be a "grim year" for customers. The companies making "billions of pounds of extra profits from these price rises" should start new plans to help vulnerable customers, he says.
While the price hikes may sound like doom and gloom, there are plenty of steps you can take to cut costs. Greater competition for gas and electricity has sprung up since deregulation in the 1990s, and one of the easiest ways of mitigating price rises is to switch supplier.
By doing so, you could save up to £200 on your gas and electricity bills, claims the price-comparison service SimplySwitch.com.
Fed up with high fuel charges, Daniel Atzeni and his girlfriend, Dawn Kendall, of Northolt in Middlesex, switched suppliers for the first time last November.
The couple acted when they received their September gas bill from British Gas. "There was a massive difference in the total from the previous month," says Daniel, 28.
"We [moved] from British Gas and from electricity supplier SSE to a "dual fuel" tariff with Powergen. It's given us a £150 annual saving on our bills."
Although circumstances will differ for every household - you won't always reduce bills by taking both gas and electricity from the same supplier - you can usually make some savings by paying by direct debit (monthly or annually) and being prepared to manage your account online.
SSE, for example, knocks 6 per cent off your bill for gas and electricity if you use direct debit, while British Gas offers a £5 discount for each form of energy to customers who opt for paperless billing.
Another option is a preset "capped" tariff. While this will cost you more than on a standard contract, you will have peace of mind.
For example, if your power supplier is charging you 20p per unit at the moment, it might offer a cap of 25p fixed for a number of months or years. If the price per unit rises above this, you won't have to pay any more.
Watch out, though: with several providers - including EDF, British Gas and Scottish Power - that fixed rate won't go down either.
However, at Powergen, there may be price falls on gas and electricity deals if wholesale prices drop.
With capped deals, check for exit penalties if you switch before the agreement expires: British Gas levies a fine of up to £45.
Some providers offer help for older, vulnerable people. Powergen's StayWarm scheme is open to those aged 60 and over and offers a fixed price for 12 months from signing up.
And greater energy efficiency is another way to warm your home for less.
"Simple measures such as switching to energy-efficient lightbulbs, insulating lofts and walls, and installing efficient heating systems can shave as much as £250 a year off your energy bills," says Philip Sellwood, the chief executive of the Energy Saving Trust (EST).
Financial grants are available for measures like these. For more information, contact 0845 727 7200 or www.est.org.uk.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Children's bookseller wins The Independent's new author search
Board creates magnetic field to achieve lift
- 1 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 2 Banksy arrest hoax: Internet duped by fake online report claiming artist's identity has been revealed
- 3 Former East 17 frontman Brian Harvey turns up at Downing Street and 'demands to speak to Prime Minister'
- 4 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
- 5 Paralysed man Darek Fidyka walks again after treatment by British doctors on brink of 'cure'
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
Jose Manuel Barroso warns David Cameron against making 'historic mistake' over immigration reforms
Worst Airports of 2014: Poll names Islamabad airport in Pakistan worst in the world
iJobs Money & Business
£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...
£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...
£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...
£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...
Day In a Page
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village