More energy price hikes affect millions
Today E.ON has announced a price hike that will affect over 4 million customers.
Standard prices will increase by 9% for electricity and 3% for gas. This will result in a 16p per day rise for the average dual fuel customer.
This makes the energy giant the fifth energy supplier to announce price hikes for customers during the coldest months of the year.
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British Gas, npower, Scottish and Southern Energy and Scottish Power have already increased prices on their variable tariffs affecting 15 million households across the UK. The latest increase will take that number to nearly 20 million.
EDF Energy announced a winter price freeze until March 2011 ensuring their customers will not face an unwelcome price rise during the coldest part of the year.
| Supplier | Gas price increase | Electricity price increase | Effective date |
| Scottish Power | 2% | 8.9% | 25 November 2010 |
| British Gas | 7% | 7% | 10 December 2010 |
| Scottish and Southern Energy | 0% | 9.4% | 1 December 2010 |
| npower | 5.1% | 5.1% | 4 January 2011 |
| E.ON | 3% | 9% | 4 February 2011 |
| EDF Energy | 0% | 0% | Pledged no price rises until at least 31 March 2011 |
Wholesale gas prices have soared dramatically over the last year and have increased 35% since March 2010. It was only a matter of time before the increase would feed into retail prices and all suppliers have cited wholesale costs as the reason behind the price hikes.
It is estimated that 40% of a household’s yearly energy consumption takes place during the winter months.
The situation has been exacerbated as more cold weather will no doubt push bills up even further. The Met Office has indicated that last month was the coldest December in 100 years and more cold weather is forecast in the coming weeks.
What you can do
Following this latest price hike, many of us may be anxious about how rising utility bills will affect our already stretched budgets. As a consequence, a number of households may consider switching to a fixed tariff which guarantees the price of gas and electricity for a set amount of time whatever happens in the market.
It is worth noting, however, that this added peace of mind comes at a price and you will pay more for a fixed tariff than the market-leading energy plan.
At present, variable rate products represent the most competitive deals but prices can fluctuate so you will not be protected against future price increases which could make fixed rates the most appealing option at the moment.
Here is a selection of the best fixed rate deals on the market.
| Supplier | Fixed Tariff | Rates Fixed until | Average annual bill |
| Scottish & Southern Energy | Atlantic Fixed Price 3 | 12 Months from start of supply | £1,016 |
| EDF Energy | Annual Fix Version 1 | 31st December 2011 | £1,045 |
| OVO Energy | New Energy Fixed | 12 Months from start of supply | £1,056 |
| npower | Price Fix 2012 | 31st December 2011 | £1,102 |
| ScottishPower | Capped Price Energy December 2012 | 30th November 2012 | £1,150 |
| British Gas | Price Promise October 2012 | 31st October 2012 | £1,184 |
Source: BeatThatQuote.com/ Prices correct as of 11/01/2011 *
Investigation
Energy firms are under investigation by regulator Ofgem as the recent price hikes will result in a 38% increase in profit margins.
Ofgem calculates that energy firms' net profits will rise from £65 per customer in September to £90 taking into account recent price increases.
Ofgem will probe to see if further action is needed to safeguard customers with the results due in March 2011.
* Annual bills based on an average medium user (20,500 kWh gas and 3,300 kWh electricity) averaged across all regions, paying by monthly direct debit
**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**
