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%.
The battle for control of Stieg Larsson's £30m legacy
Geoffrey Macnab does not like the comedian's big screen debut
Look beyond the usual shows for the best festive telly
Michelle Nijhuis' daughter insists (s)he is, and she learnt a valuable lesson on gender in books
newsFormer soldier taped 33 of the animals to the floor and then stamped on them one by one
Robin Thicke named sexist of the year 2013
PAs cleared of fraud - and Nigella Lawson left reeling at 'ridiculous sideshow' of drug allegations and public dissection of marriage to Charles Saatchi
Cycle death inquest: Boyfriend hugs driver of 32 tonne tipper truck that killed his girlfriend
Paul Walker death caused by speed alone
Apollo Theatre collapse: Scores injured after ceiling collapses in London's West End
- 1 Sun will 'flip upside down' within weeks, says Nasa
- 2 Christmas comes early: Justin Bieber is 'retiring from music'
- 3 Iain Duncan Smith leaves Commons food banks debate early
- 4 Cycle death inquest: Boyfriend hugs driver of 32 tonne tipper truck that killed his girlfriend
- 5 Burglar steals video tapes of child abuse, hands them into police
- < Previous
- Next >
iJobs Money & Business
£Negotiable: Citifocus: High calibre individual with institutional client serv...
£120000 - £150000 per annum: Cornwallis Elt : Programme Manager, Strategy Lead...
£55000 - £120000 per annum: Pro-Recruitment Group: The Financial Services Tran...
£600 - £700 per day: Harrington Starr: Client based in West London is looking ...