Independent gas and electricity supplier Ovo Energy announced a 7.7 per cent increase in its dual fuel fixed tariff prices this week with immediate effect. The move more than reversed a 5 per cent cut in January and means an average household will now pay £1,139.85 a year for the New Energy dual fuel tariff, compared with £1,061 in January – an increase of more than £78.
The firm has just 90,000 customers but its move could be a sign that similar hikes are in prospect by the Big Six firms, which currently supply energy to 99 per cent of British homes.
Mark Todd, director of the price comparison service Energyhelpline.com, warned: "The move by Ovo highlights the volatility of wholesale prices at the moment. Winter forward prices are now only 2 per cent below their summer peak when the price rises occurred, so it looks like prices are unlikely now to go down any further.
"However, if wholesale prices keep rising then there is a distinct risk that the Big Six suppliers start to hike prices again."
The big firms are notoriously slow to pass on price movements to customers. Indeed SSE is actually cutting prices at the end of the month – a move announced back in January.