Npower and E.ON set to hike prices as cost of wholesale gas soars
Sunday 31 July 2011
Npower and E.ON are set to become the latest energy suppliers to announce price hikes this week, a rise prompted by the 30 per cent increase in the wholesale cost of gas, so far this year.
The two firms will unveil significant price rises following the news that Centrica, which owns British Gas, has put up its prices by 18 per cent for gas and 16 per cent for electricity. Scottish & Southern Energy announced last week that its prices will go up by 18 per cent for gas and 11 per cent for electricity, with effect from 14 September, leaving millions of consumers with huge winter energy bills. The increases equate to around £200 extra for a household's annual gas and electricity bills.
The industry potentially faces an inquiry into price hikes by the Competition Commission, but Centrica's chief executive, Sam Laidlaw, has defended the price rises, and said that customers lack understanding.
Centrica announced a 19 per cent fall in profits to £1.26bn for the first half of this year and said that its profit fall justifies its plans for price hikes.
But Ofgem, the regulator, has said that energy providers increase prices faster than they reduce them.
Stephen Fitzpatrick, founder and managing director at energy company Ovo, said: "Ninety-nine per cent of Britain's energy customers are paying more than they need to be. If they have never switched, they will be on a standard tariff and can probably get a lower rate from their own supplier – and can definitely get a lower rate if they go to another."
Meanwhile, energy firm EDF has not ruled out price rises, but has been marketing a dual-fuel product, with a price fixed until September 2012. "EDF Energy's prices are constantly under review," the firm said. "But it should be noted that we were the only major supplier to freeze its prices over [last] winter, when Britain endured the coldest December for 100 years."
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