Consumers hit by gas and electricity price rises

Energy firms Npower and Scottish Power today announced more bad news for households with steep hikes in gas and electricity prices.

Npower said prices for gas customers would increase by an average 26%, with prices for electricity customers up by 14%, both with immediate effect.

Scottish Power followed a few hours later by announcing it would increase gas prices by an average 34% and electricity prices by 9% from Monday.

The firms have 11.8 million customers between them.

Both blamed the soaring wholesale costs, saying they had made current pricing levels unsustainable.

They are the last of the country's suppliers to hit households with increases in recent weeks, following moves by British Gas, EDF, E.On and Scottish & Southern Energy.

Npower said the average gas customer would see an average annual increase of £162 with electricity bills rising by an average £60.

The firm claimed that until today its domestic gas prices had been the same as they were 18 months ago following a price decrease in 2007 and an increase in January, but wholesale costs had doubled.

Electricity generation had also been directly affected by the soaring price of raw materials prices, which had increased by 122% for gas and coal and 79% for oil over the last 12 months.

Npower managing director Giuseppe Di Vita said: "I'm sorry we've had to increase our prices, and we've made this decision extremely reluctantly, especially as household budgets are being squeezed so much at the moment.

"There is help available for people who can't afford to pay their bills and we want our customers to get in touch if they're worried."

Scottish Power said the average dual fuel customer would see bills increasing by 25%.

About 1.2 million of the company's customers were currently protected by fixed-price tariffs, it said.

The company today offered a new tariff guaranteeing prices until December 2009.

Willie MacDiarmid, Scottish Power's director of energy retail, said: "These are difficult times and we understand the financial impact this announcement will have on our customers.

"Although we're one of the last companies to announce increases, we're sorry we couldn't hold on any longer. However, we have worked very hard to protect people for as long as possible from these considerable increases in the wholesale market.

"We have tried hard to keep electricity prices as low as possible and our increase of 9% is the lowest in the sector.

"The continuing volatility in the global market for gas is directly contributing to increasing UK's domestic energy prices and Scottish Power is not immune to these rises."