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

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%.

PA

Suggested Topics
PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Analyst - ALM Data - Banking - Halifax

£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...

Java developer - Banking - London - Up to £600/day

£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...

Liquidity Reporting-Basel III-LCR-Bank-£400/day

£400 per day + competitive: Orgtel: Liquidity Reporting - Basel III - LCR - Ba...

Client Services Associate (MS Office, Analysis, Graduate)

Negotiable: Harrington Starr: Client Services Associate (Microsoft Office, Ana...

Day In a Page

Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
How live cinema screenings can boost arts audiences

How live cinema screenings can boost arts audiences

Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
Shipping container hotels: Pop-up hotels filling a niche

Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
Native American headdresses are not fashion accessories

Feather dust-up

A Canadian festival has banned Native American headwear. Haven't we been here before?
Boris Johnson's war on diesel

Boris Johnson's war on diesel

11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
5 best waterproof cameras

Splash and flash: 5 best waterproof cameras

Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

Louis van Gaal interview

Manchester United manager discusses tactics and rebuilding after the David Moyes era
Will Gore: The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series

Will Gore: Outside Edge

The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz