Npower is the latest energy company to announce a price rise, with a 5.3% increase scheduled for June 17. This will add an average of £64 a year onto the bills of a million dual fuel customers, and follows on from Scottish Power announcing it will be putting prices up by 5.5% from June 1.
This means that all but one of the Big Six have decided to put prices up, SSE being the only major supplier still holding out.
Last month, British Gas announced it will be putting its prices up by 5.5%, signalling a £60 a year increase for anyone on its standard variable rate tariffs. The price hike will be applied from May 29, and comes less than a year after it pushed electricity prices up by 12.5%.
This latest increase will apply to both gas and electricity, and see its average annual standard variable dual-fuel bill go up to £1,161.
The government was quick to condemn the price rises as Energy minister, Claire Perry, said: "We are disappointed by British Gas's announcement of an unjustified price rise in its default tariff when customers are already paying more than they need to."
Unsurprisingly, Labour put the blame at the door of Number 10, suggesting the Prime Minister's hesitation to introduce a price cap has enabled the energy giant to push up prices.
2017: Theresa May promises to cap energy prices— The Labour Party (@UKLabour) April 10, 2018
Later in 2017: Theresa May delays introducing a cap
A new round of price rises was first mooted at the end of February, as a high gas demand for heating, coupled with a series disruptions to supply, meant National Grid had to issue a rare ‘gas deficit warning’ to urgently call for more supplies and ask industry to volunteer to use less.
This shortage in supply also brought with it the possibility that National Grid might even have to impose a compulsorily cut off of industrial users’ gas supplies, to help to preserve provisions for households.
It’s a situation that has seen wholesale gas prices peak at four times their usual level, surging as high as 225p per therm at the beginning of March, compared with an average of 56p per therm throughout February. And because much of the UK’s electricity supply is generated by gas-fired power plants, there’s also been a surge in wholesale electricity prices.
Suppliers are now under pressure to increase prices for consumers to help mitigate for this increase in wholesale costs, and this was one of the reasons given by British Gas, which was quick to point out Ofgem recently did the same when it announced five million vulnerable households would face a 5.5% price hike on their annual energy bills.
Mark Hodges, chief executive of Centrica Consumer, the domestic arm of British Gas’ parent company, said: "We fully understand that any price increase adds extra pressure on customers' household bills. This increase we are announcing today is reflective of the costs we are seeing which are beyond our control."
He added: "Government policies, intended to transform the energy system, are important but they are putting pressure on customers' bills. We believe government should level the playing field so the customers of all suppliers pay a fair share of energy policy costs," Mr Hodges said.
"We continue to encourage government to consider moving these costs out of energy bills altogether and into general taxation."
In short, it seems prices are going up through a combination of increased costs and the extra charges levied by the government, such as the smart meter roll out and emissions targets.
A number of energy companies have put their prices up since the turn of the year, with increases ranging from 2.5% to 10.7%, but the British Gas price increase is significant, and one energy supplier increases prices - particularly one of the Big Six - the others usually follow suit shortly after.
Don’t be surprised to see more suppliers putting up their prices during the coming months, mirroring the wave of price hikes imposed around this time last year.
It didn't take EDF long to blink - just two days after the British Gas announcement, the French-owned energy giant announced it would be putting 2.7% on the price of electricity as of June 7. The price of gas will remain unchanged.
EDF's price hikes will affect 1.3 million customers, and typical standard dual-fuel customers will see their bill rise by 1.4%, or £16 a year. And customers paying by cash or cheque, rather than by direct debit, will see their typical annual bill rise by £28 a year to £1,248.
|Supplier||Old price||New price||Difference (£)||Difference (%)||Effective from|
|Our Power||£848||£939||£91||10.7%||April 2018|
|Good Energy||£1,167||£1,249||£82||7.0%||December 2017|
|Pure Planet||£860||£908||£48||5.6%||March 2018|
|Ofgem Prepay Cap||£1,031||£1,089||£57||5.6%||April 2018|
|British Gas||£1,101||£1,161||£60||5.5%||May 2018|
|Scottish Power||£1,210||£1,273||£63||5.5%||June 2018|
Although the old saying goes that death and taxes are the only certainty in life, we may as well add energy price rises to the list, as prices go up without fail, year-on-year (admittedly, this would make the trope a lot less catchy, but still…)
The good news is there is an easy way to protect yourself from the annual price hikes, and that’s by signing up for a fixed rate tariff to lock in the price you pay for the energy you use.
Prices are usually fixed for between 12 and 18 months, and although your bills will still vary depending upon the amount of gas and electricity you use, the price you pay per unit of energy you use will remain the same for the duration of the deal, regardless of how much suppliers push their prices up by.
The freezing temperatures may have delayed any price hike announcements – putting prices up during a cold snap doesn’t make for great PR – as may have the ongoing parliamentary processes to introduce an energy price cap by next winter.
But it’s almost certain that prices will go up across the board in the coming weeks or months, so it makes sense to nail down your prices with a fixed-rate deal now.
Check out Everything you need to know about fixed rate energy tariffs for more information, and to see the best fixed rate deals on the market, or enter your postcode at the top of this page to run an energy comparison and see how much you could save on you annual bills.
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Click here to run an energy price comparison, and see if you could be paying less for your gas and electricity.