E.ON to raise energy prices by 3.7%

 

Energy giant E.ON is set to introduce a £48 price increase on annual gas and electricity bills for more than 4 million British households.

The German-owned utility is the last of the Big Six suppliers to push through a winter rise and said it was “working hard to limit the impact on its customers” by announcing a lower average rise – at 3.7 per cent — than any other major supplier.

The changes come into force on January 18.

The increase is the last to be announced by any of the so-called Big Six firms that dominate the energy supply market.

British Gas customers were told they faced a 9.2 per cent tariff hike, with SSE rates going up 8.2 per cent, npower 10.4 per cent, and Scottish Power 8.6 per cent.

However, they have said they will pass on savings from a shake-up on green levies announced earlier this week that it is estimated could shave £50 off bills.

EDF has announced a 3.9 per cent rise, saying it was holding back the full impact of rising costs in anticipation of the Government's changes.

While E.ON's rise is lower than those of its rivals, it is still higher than the inflation rate of 2.2 per cent

It blamed the rising costs of delivering energy and buying wholesale gas and electricity while also admitting £4 on every typical bill would go on extra profit.

Caroline Flint, shadow energy and climate change secretary, said: "This latest price hike just goes to show that even after the Government's changes to green levies people's energy bills will be higher this winter than last. This is why nothing less than a price freeze and reforms to stop the energy companies overcharging again in the future will do.

"The Government boasts about the economic recovery, but soaring energy bills are one of the main reasons working people are £1,600 a year worse off under David Cameron."

An analysis of Big Six tariffs by Consumer Futures showed that following the latest changes, npower customers will face the largest bills, with the typical average charge paid by direct debit at £1,396.

Next is British Gas on £1,388, followed by Scottish Power on £1,383, SSE on £1,376, E.ON on £1,322 and EDF on £1,300.

However the table does not take into account pledges to reduce tariffs in the light of changes to green levies.

Audrey Gallacher, director of energy at Consumer Futures, said: "E.ON's price rise of 3.7 per cent is unwelcome, but not surprising with this being the sixth price increase announcement in recent weeks.

"Rising prices, the complexity of the market and uncertainty on government policy has created a crisis of confidence in public trust.

"The energy marketplace needs urgent scrutiny, with a competition review to look at the structure of the market and a value for money review to ascertain the costs and benefits of government policy."

Energy Secretary Ed Davey said the E.ON rise was "disappointing" but added that the rise was lower than it would have been because of the changes announced by the Government.

He added: "This does not let energy companies off the hook. They will keep up their efforts to help people in fuel poverty cut their bills by making sure their homes leak less heat, and they will have to be more transparent about what they're spending on social and environmental measures."

PA

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