E.ON prices to soar

Energy company E.ON today said its prices will rise by 11.4% for electricity customers and 18.1% for gas from September 13.

The supplier follows British Gas, Scottish Power and Scottish & Southern Energy in announcing price rises in recent weeks, which the industry has blamed on a 30% rise in wholesale costs since last winter.

E.ON has around five million customers but said almost 600,000 were unaffected by the rise, including its most vulnerable customers on WarmAssist tariffs.

E.ON said the average dual fuel bill for a customer paying with direct debit will rise by 15.2% to £1,190 from next month.

As well as the price hike, E.ON has launched a product for existing customers which will fix prices for two years with no penalty for early exit. It has also guaranteed no more price increases for Age UK customers for at least a year.

E.ON director Graham Bartlett said: "I know that this is hard for customers and want to help them avoid future price volatility, which is why we've launched our new two-year fixed price deal."

Lobby group Consumer Focus said customers were still in the dark about whether the recent round of industry price rises was warranted.

Chief executive Mike O'Connor added: "Customers will feel they didn't get the benefit when wholesale costs were low. Wholesale costs are around a third lower than their 2008 peak yet consumer prices have reached an all-time high."

He said regulator Ofgem should refer the industry to the Competition Commission if it is unable to say for certain whether prices are fair.

Mr O'Connor added: "It is even more important these questions are answered with £200 billion of investment needed in cleaner power plants and other low carbon programmes set to push bills up further. If consumers are to stomach such price rises, they need to know they are fair."

It is the second price rise by E.ON this year after it increased electricity tariffs by 9% and gas by 3% in February.

Meg Hillier, Labour's energy spokeswoman, said pay freezes and job losses meant many people have nowhere to find the extra money when the costs of basic heating and hot water go up so much in one go.

She added: "It's time the biggest six energy companies were referred to the Competition Commission. Most people don't understand their energy bills and trust in the companies is at an all-time low. An external inquiry is needed."

PA

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