E.ON follows lead of other big-six energy suppliers and raises prices
Announcement comes after EDF Energy's 10.8% price rise for domestic gas and electricity came into force last week
Monday 10 December 2012
Energy group E.ON today became the last of the big-six energy suppliers to announce it will increase tariffs this winter.
Its average dual fuel bill will increase on January 18 by 8.7%, with electricity rising 7.7% and gas by 9.4%.
Having pledged in May to keep residential energy prices on hold during 2012, E.ON said the new year rise was necessary due to the price of energy on the wholesale markets and regulatory costs.
E.ON has about 4.8 million domestic customers but 800,000 of its customers on fixed and capped tariffs will not be hit by the price rise.
From 18 January, a typical standard dual fuel customer paying by cash or cheque will see their bill rise by around £110 a year to £1,370.
Audrey Gallacher, director of energy at Consumer Focus, said: "Most industries will pass on rises in costs, but given the low levels of confidence consumers need to be reassured that retail bills, wholesale costs and company profits are in balance."
Rising energy prices have been a major driver of high inflation that has been squeezing households in recent months.
Today's announcement comes after EDF Energy's 10.8% price rise for domestic gas and electricity came into force last week.
SSE, which trades as Southern Electric, Swalec and Scottish Hydro, increased its tariffs by 9% on October 15, while Scottish Power hiked bills by an average 7% on December 3.
British Gas imposed an average increase of 6% affecting 8.5 million customers from November 16 and Npower's average rise of 8.8% for gas and 9.1% for electricity came into force on November 26.
E.ON chief executive Tony Cocker, said: "We have held back from increasing our prices for as long as we possibly could and at the same time have worked hard to reduce our own costs as a business so that our customers can get the best price possible.
"However, some 16 months after our last price increase, and almost a year since we actually cut our electricity prices, we have had to make the difficult decision to increase our prices."
E.ON said that, as well as higher energy prices on the wholesale market, its network costs - the prices it pays to use the wires and pipes to transport energy - had jumped 10% this year.
The German utility company also said the cost of social schemes, including providing free or subsidised insulation, had more than doubled in the last 12 months.
The cost of using more renewable energy, which E.ON said had increased by more than 60% from last year, was also blamed for the bill rise.
E.ON said it expected costs to rise further next year and said it would also be hit by the Government's carbon price floor, which requires energy companies to pay a minimum price to cover their pollution.
E.ON added that last year its domestic profit margin had been less than 2%.
- 1 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 2 Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
- 3 Lego breaks out of the toy box and heads for the gallery
- 4 Vogue under fire for 'Big Booty' article
- 5 Julian Assange and Edward Snowden join piracy mogul Kim Dotcom’s political campaign in New Zealand
Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Jihadi John': MI5 may have identified Isis militant who killed David Haines but options limited
Scottish independence: Police will be on high alert on Friday whatever the result
David Haines beheading: David Cameron says Britain will hunt down Isis 'monsters' shown in video murdering aid worker
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
Salmond accused of laughing off national debt with ‘what are they going to do: invade?’ joke
iJobs Money & Business
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...
Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)
£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...