E:ON becomes latest energy giant to hike prices with an 18% increase on gas

Published 05th Aug 2011

E:ON has become the latest energy company to announce a massive price hike for British customers.

The cost of electricity will rise by 11.4 per cent from September 13 while gas prices will increase by 18.1 per cent.

The company said the move was forced by rising wholesale energy costs.

The energy supplier is the fourth of the ‘big six’ to announce a price rise turning up the heat on 4.4million of its 5million customers by adding £170 to the average E.ON bill.

It last raised prices in February this year by 3.3 per cent for gas and 9.3 per cent for electricity – in total its customers will have seen their bills increase by £232 or 22 per cent this year.

In a bid to pacify some customers E:ON has promised not to increase the price of its Age UK Energy tariffs - a social tariff that the supplier is obligated to supply to vulnerable customers - until at least September next year.

Earlier this year energy regulator, Ofgem announced an investigation into the market after finding evidence that there are in fact large differences between what suppliers pay for wholesale energy.

But energy firms continue to raise blaming their own rising costs. They often cite Ofgem figures which show that wholesale prices have gone up by around 30 per cent since last winter.

Graham Bartlett, managing director of E.ON’s energy solutions business, blamed world events for pushing up energy prices.

He said: ‘Uncertain times have had a huge effect on wholesale prices, with events in Japan and Libya all having a dramatic effect on gas and power prices in a relatively short period of time.

Last month, Scottish Power was the first supplier to order an increase, adding 19 per cent to electricity and 10 per cent to gas bills.

Next, British Gas announced the biggest increase so far: 18 per cent on gas and 16 per cent on electricity. Then Scottish and Southern Energy followed with an 18 per cent rise for gas and 11 per cent rise for electricity.

Mike O’Connor, chief executive of Consumer Focus, said: ‘Yet another price rise will leave the average energy bill weighing in at £1,250 a year. Customers need to know whether these increases are warranted.'

'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.’

‘Ofgem has said it is prepared to refer the energy market to the Competition Commission if necessary. That is welcome but the regulator must be prepared to act if it can’t say for certain whether prices are fair.’

Source: ' ThisIsMoney '

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