Four of the major suppliers of Gas and Electric have increased prices since July 2008.

On 21st August Scottish & Southern Group confirmed rice increases of 29% on Gas & 19% on Electricity for all their brands, effective from Monday 25th August 2008.

E.On announced on 21st August that they were increasing prices on 22nd August; Gas prices are going up by 26% and Electric by 16% if your Gas or Electric is supplied by E.On.

For protection against price rises of Gas and Electric you may want to switch your supplier and benefit from savings or subscribe to a capped or fixed rate tariff to protect you from future price rises.

You can compare prices of different suppliers of Gas and Electric with BRITENERGY.CO.UK to find the best savings available for you.

British Gas announced on 30th July that prices would increase by 35% on Gas and 9% on Electric. This was only 5 days after EDF had anno9unced on 25th July that prices would increase to EDF customers by 22% on Gas and 17% on Electric.

NPower, Scottish Power and other energy suppliers are all expected to increase their prices.

Customers can benefit from lower prices by choosing an on line tariff. This means that bills are provided on line by email or web site access. On line tariffs mean that you do not receive a paper bill in the post.

It can be cheaper to have a dual fuel tariff as well. A dual fuel tariff means you receive 1 bill for your Gas and Electric from the same supplier. It is also cheaper to pay Gas and Electric bills by direct debit.

News Stories

Energy firm E.On to raise prices (Thursday 21st August 2008)

Energy firm E.On is to raise gas prices by 26% and electricity prices by 16% on 22 August.

It is the third of the big six energy companies to increase prices for domestic customers during the summer.

It blamed an increase in wholesale costs, which it said had risen by more than 51% since February, for the latest rise - the second in a year.

E.On said dual-fuel customers would see an average annual increase in their bill of £227.

The average annual bill for an E.On customer paying by monthly direct debit would be £1,194 following the latest rise, up from £967. The average for those paying in other ways would be £1,259, the company said.

Those paying on a pre-payment meter would face an average annual bill of £1,298.

EDF Energy and British Gas raised their prices for domestic customers in July, and others are expected to follow suit.

'Tough time'

Graham Bartlett, managing director of E.On's retail business, said that the company had tried to keep the increases as low as possible to protect customers.

NEW ANNUAL E.ON DUAL FUEL PRICES

Average bill paid by monthly direct debit - £1,194 - up from £967

Average for cash and quarterly demand payment - £1,259 - up from £1,031

Average pre-payment meter - £1,298 - up from £1,097

Source: E.On

"I'm very aware of the effect that today's announcement will have on our customers and I recognise that this is a very tough time for everyone," he said.

This is E.On's second price rise for domestic customers this year. In February it put up gas bills by 15% and electricity tariffs by 9.7%.

The German-owned company has 5.5 million customers in the UK.

In the latest round of price rises in July, EDF Energy put up gas prices by 22% and electricity prices by 17%. Shortly afterwards, British Gas put up gas bills by a record 35% and electricity tariffs for its customers by 9%.

Fuel poverty

Adam Scorer, of watchdog Energywatch, said that the price rises were not a surprise owing to the picture across the industry.

"The brakes have come off the market," he told the BBC.

He said that the "good times" of self-sufficiency from the North Sea gas supply - which meant the UK's gas prices were the lowest in Europe - were over and so rising prices should be expected.

He said that consumers were waiting for the government to publish its intentions on tackling fuel poverty and for regulator Ofgem to complete its inquiry into competition in the energy market.

The number of households in fuel poverty would rise to above five million, he added.

Gordon Lishman, director general of Age Concern, said the latest rises were a "huge blow" to those struggling to pay bills and called for the introduction of fuel vouchers by the government.

"We are extremely concerned that the one in three pensioner households likely to be living in fuel poverty by the end of the year will feel forced to cut back on essential food or fuel," he said.

'Investment'

E.On said it was helping those on pre-payment meters. It said it was the first energy company to match the prices of pre-payment meter customers and standard customers if they used the same amount of energy.

The difference in the average annual price between the payment methods is due to discounts for prompt payment that are only available to standard customers.

E.On's commercial director Jim Macdonald told the BBC that the industry was spending billions in investment.

He said E.On was investing more than £200m in a gas storage scheme in Cheshire which would allow it to store gas when prices were lower in the summer and smooth out some of the volatility in wholesale gas prices.

Scottish and Southern Energy, Scottish Power, and Npower have yet to raise prices this summer, although they are expected to follow suit in the coming weeks.

Fuel price rises differ across UK (1st August 2008)

Customers of the major energy companies have different dual fuel bills depending on where they live in the UK.

EDF Energy and British Gas raised prices in recent days but some areas have seen bigger increases than others.

EDF customers in South Wales pay £94.47 more a year than those in the North West for the same energy usage, and British Gas also shows differences.

The companies say that transportation costs, accounting for about 14% of the average bill, differ across the UK.

For British Gas customers, the biggest difference is £31.23 a year when comparing direct debit paying customers in the Southern and South East areas.

The differences were highlighted when the two companies raised their prices within a week.

Highs and lows

On 25 July, EDF was the first of the big six energy companies to raise prices this summer when it raised gas prices by an average of 22% and electricity prices by 17% for domestic customers.

Our aim is to be as competitive as possible in each region

British Gas spokesman

Figures obtained by the BBC show that, following the changes, South Wales remained the area with the most expensive dual fuel EDF Energy bills. The South West and South Scotland was the next most pricey.

The cheapest areas are the North West, the Eastern region and Yorkshire.

On 30 July, British Gas announced it was raising gas prices by a record 35% and electricity prices by 9%.

The UK's biggest domestic energy supplier, which has 15.9 million customers, blamed "soaring wholesale energy prices".

For British Gas dual fuel customers, the Southern and Eastern areas are the most expensive. Those in the Southern area have seen a 30.8% price hike in the latest round of increases.

The former Seeboard area of the South East and Yorkshire are the cheapest.

Transport costs

A British Gas spokesman said that the maximum regional variation was plus or minus 2.7%.

There were also regional differences in the price changes for customers who pay for gas and electricity separately, he said.

Electricity supply had always been regionally priced in the UK, based on the 14 old supply regions.

The British Gas spokesman said that regional gas pricing reflected the different transport and distribution charges applied by regulated local mains operators.

Basically, the closer customers are to a distribution point, the lower the cost, he said.

He added that British Gas previously averaged out these costs when it passed them on to customers, but now transport and distribution costs made up 14% of a gas bill, the company has decided to charge differently in each region.

"Our aim is to be as competitive as possible in each region," he said.

The other companies in the "big six" group of suppliers are expected to raise prices in the coming weeks.

BRITISH GAS REGIONAL PRICE VARIATIONS

 

	% change	£ change	Before price rise	After price rise
Eastern	30.8%	£294.78	£955.90	£1,250.68
East Midlands	27.8%	£267.56	£961.70	£1,229.26
London	29.1%	£278.91	£957.21	£1,236.12
ManWeb	27.6%	£270.26	£978.75	£1,249.01
Midlands	28.6%	£275.84	£963.70	£1,239.54
Northern	26.2%	£258.38	£985.92	£1,244.30
Norweb	27.7%	£269.68	£975.06	£1,244.74
Scottish Hydro	28.7%	£276.44	£962.23	£1,238.67
Scottish Power	27.8%	£268.97	£965.94	£1,234.91
Seeboard	29.7%	£280.09	£942.98	£1,223.07
Southern	30.3%	£291.94	£962.36	£1,254.30
Swalec	26.4%	£259.13	£981.96	£1,241.09
Sweb	27.1%	£266.73	£983.60	£1,250.33
Yorkshire	26.5%	£257.07	£968.97	£1,226.04

Note: Bills are for dual fuel paid by monthly direct debit. They include VAT and are based on average annual consumption of 20,500 kWh for gas and 3,300 kWh for single rate electricity.

EDF REGIONAL PRICE VARIATIONS

 

	% change	£ change	Before price rise	After price rise
London	21.10%	£206.56	£981.07	£1,187.63
South East	21.10%	£204.86	£970.71	£1,175.57
South West	21.00%	£211.34	£1,008.42	£1,219.76
North Scotland	21.00%	£208.07	£989.23	£1,197.30
South Wales	21.00%	£211.41	£1,008.92	£1,220.33
Southern	21.20%	£202.50	£956.91	£1,159.41
Eastern	21.30%	£197.73	£929.04	£1,126.77
East Midlands	21.20%	£200.38	£944.44	£1,144.82
North West	21.30%	£197.71	£928.15	£1,125.86
North East	21.30%	£198.96	£936.25	£1,135.21
West Midlands	27.1%	£266.73	£983.60	£1,250.33
Yorkshire	21.30%	£198.84	£934.83	£1,133.67
North Wales	21.00%	£207.75	£987.03	£1,194.78
South Scotland	21.00%	£208.39	£991.97	£1,200.36
Average	21.10%	£203.90	£964.95	£1,168.85

Note: Bills are for dual fuel paid by monthly direct debit. They include VAT and are based on average annual consumption of 20,500 kWh for gas and 3,300 kWh for single rate electricity.

Story from BBC NEWS:

Record rise for British Gas bills (30th July 2008)

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Centrica Boss Phil Bentley defends gas prices rises

British Gas owner Centrica says it is raising gas prices by a record 35% and electricity prices by 9%.

The UK's biggest domestic energy supplier said that the price hikes would take place with immediate effect.

It blamed "soaring wholesale energy prices", but added that standard tariff prices would not rise again in 2008.

The move comes just a few days after rival EDF Energy put up gas prices by 22% and electricity prices by 17%, with other firms expected to follow suit.

Watchdog Energywatch said it believed the 35% gas bill rise was the biggest single increase in the price of a utility seen to date.

British Gas, which has 15.9 million customers, also announced that its profits for the first half of the year were down by 69% to £166m.

Centrica said the average dual fuel bill for a British Gas customer would go up by 25% - putting the average household bill at about £1,240. This is the second increase this year, after a 15% rise in bills in January.

"We very much regret that we have had to make this decision at a time when many household budgets are already under pressure," said British Gas managing director Phil Bentley.

"The simple fact though is that we have entered an era of unprecedented high world energy prices."

PRICE CHANGES FOR DUAL FUEL BRITISH GAS CUSTOMERS

Average direct debit from £968 to £1,240

Average standard credit from £1,055 to £1,317

Average pre-paid meter from £1,144 to £1,383

Source: British Gas, figures are based on a medium usage customer

A report prepared for Centrica earlier this month warned that annual average gas bills could rise from £600 to more than £1,000 early in the next decade.

Centrica said that wholesale gas prices in the coming winter would be up 89% on the previous winter.

It added that the UK was suffering from diminishing gas reserves, and estimated that the UK would import 40% of its gas this year compared with 27% last year.

The price of gas has risen in recent months as it is linked to the cost of oil, although oil prices have started to fall again in recent weeks. Energywatch described the link as "absurd".

Fuel poverty

The move will heighten concern about rising levels of fuel poverty - defined as when a household spends more than 10% of its income on fuel bills.

But British Gas's Mr Bentley told the BBC that the firm would be working hard with its poorest customers to ensure their homes were energy efficient.

PRICE CHANGES FOR GAS MEDIUM USER

Average direct debit from £588 to £834

Average standard credit from £656 to £882

Average pre-paid meter from £712 to £923

Source: British Gas

The 340,000 customers on the Essentials account, aimed at low-income groups, will have prices frozen until April 2009.

Tim Wolfenden, head of home services at price comparison website Uswitch.com, said that for everyone else the major jolt would come in March when bills landed after winter gas use.

Inflation effect

The price rises will also draw extra attention to Centrica's results which are published on Thursday.

British Gas said it was working hard to take costs out of the business and was on target to save £60m this year, but it could not absorb the impact of such high wholesale prices.

Mr Scorer said it people would want to know how British Gas owner Centrica was doing as a gas wholesaler.

And Steve Bloomfield, national officer at Unison, said Centrica had seen huge increases in profits as a producer and retailer of gas.

He said the government should take steps to reform the energy market.

"Customers and staff deserve a fairer deal," he said.

PRICE CHANGES FOR ELECTRICITY MEDIUM USER

Average direct debit from £394 to £420

Average standard credit from £414 to £460

Average pre-paid meter from £432 to £475

Source: British Gas

Analysts have suggested that the price rises could have a significant effect on inflation.

If all the suppliers raised prices by about the same amount as British Gas it would add just less than 1% to the Consumer Price Index (CPI), which currently stands at 3.8%.

Analysts at Capital Economics and Deutsche Bank said in August, when CPI was already predicted to be 4.1%, it could breach 5% although price falls elsewhere could keep it below 5%.

RPI would increase from 4.6% to 4.8% as the weighting put on energy prices was different, they said.

Story from BBC NEWS:

MPs warn of energy price impact (28th July 2008)

Rises in gas and electricity bills in the near future will have serious consequences for millions of households, an MPs' committee has said.

It also warned that thousands of jobs in manufacturing would be at risk if UK prices stayed higher than those faced by industry in the rest of Europe.

The Business and Enterprise Select Committee report said problems in the sector needed to be addressed urgently.

But it found no evidence that key firms colluded to keep energy prices high.

The committee's report, published on Monday, comes just a few days after EDF Energy became the first big supplier to announce widely-predicted summer price rises.

Competitors

The committee decided on an inquiry after the "big six" energy companies announced double-digit price rises at the start of 2008.

FROM THE TODAY PROGRAMME

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The big six firms are: Npower, EDF Energy, British Gas, E.On, Scottish Power, and Scottish and Southern Energy.

The report voiced concerns that "the UK's energy markets are not functioning as efficiently as they should".

"Industrial consumers now face prices above European levels," the report added.

"If these price differentials are sustained, they will affect the competitiveness of the UK economy."

'No collusion'

The inquiry addressed the issue of why there was only a very small difference in prices charged by the major suppliers.

We believe that the time is right for a root and branch review of government policy on fuel poverty
Select committee report

It said that nobody brought any evidence of price collusion among the big six, simply that it was easy for each to predict what the other five were going to do.

"Just because we have found no evidence of collusion does not mean we have given the big six energy companies a clean bill of health - far from it," said committee chairman Peter Luff.

"It is clear that there are very real problems in the energy markets at all levels ... which need to be addressed."

The committee was concerned about how the wholesale markets functioned, including why gas producers appeared unwilling to trade in the forward gas market.

The report was critical of the government for failing to act quickly enough to encourage investment in gas storage, as the UK becomes more dependent on importing gas.

It also warned that the potential takeover of British Energy could undermine the diverse market in electricity generation in Britain.

Fuel poverty

Energy regulator Ofgem, which is conducting its own inquiry into the market, was also criticised, with the committee demanding a "greater sense of urgency" in some areas.

On Friday, EDF raised gas prices by 22% and electricity prices by 17% for domestic and small business customers.

With all the major suppliers expected to follow suit in the coming weeks, the committee said there would be an inevitable increase in fuel poverty.

The government estimates that 2.5 million households are in fuel poverty - defined as when more than 10% of household income is spent on fuel bills - but watchdog Energywatch says the figure is more than four million.

"We believe that the time is right for a root and branch review of government policy on fuel poverty," the committee said.

It said social tariffs failed to reach the vast majority of fuel poor customers, were inconsistent and confusing.

The committee wants the government to define the criteria for these tariffs and identify the customers who should qualify for the discounts.

It also wants more focus on improving energy efficiency in homes, to help cut bills, and called for an reversal of the funding cuts in Warm Front grants.

Story from BBC NEWS:

EDF customers face higher bills (25th July 2008)

EDF Energy has announced it is putting up gas prices by 22% and electricity prices by 17% for domestic customers.

The firm has blamed the increase, which comes into effect on 25 July, on record wholesale energy costs.

Energy companies have been widely expected to raise the costs of utility bills this summer, as wholesale prices have been rising.

EDF is the first of the major suppliers to raise prices this summer and others are expected to follow suit.

The company said it had been absorbing higher costs in recent months but it now needed to pass on costs to domestic and small business customers.

It is the second rise for EDF customers this year.

Tim Wolfenden, head of home services at price comparison website Uswitch.com, estimated that the average annual bill for dual-fuel EDF customers would rise by £200 to just over £1,200.

'Unprecedented rises'

EDF said that energy prices had increased by 70% for coal, 63% for gas, and 47% for electricity since it last increased its prices.

Big six energy companies

Average annual bill for dual fuel customer

EDF £1,168

Npower £972

British Gas £968

E.On £967

Scottish Power £959

Scottish and Southern Energy £956

Source: Energywatch

EDF - which has about 5.5 million UK customers - increased gas prices by 12.9% and electricity prices by 7.9% in January.

Eva Eisenschimmel, chief operating officer of EDF Energy customers branch, said the company had been doing everything it could to keep its own costs in check.

"Record world oil prices have continued to drive up wholesale gas prices. Alongside unprecedented rises in wholesale coal and electricity costs, this has impacted hugely on the cost of supplying energy to our customers," she said.

However, oil prices have started to dip again in recent weeks.

Price warnings

The move by the French company, one of the largest suppliers in the UK, is likely to prompt similar moves by the other "big six" energy companies.

It will highlight concerns over the number of people in fuel poverty - those spending more than 10% of their household income on fuel bills.

EDF said 100,000 of its most in-need customers would benefit from 15% discounts on bills as it had extended its social tariff scheme.

It also said it was supporting the concept of a targeted fuel voucher scheme this winter.

The price rises come the day after rival company Scottish and Southern warned customers it was likely to increase electricity and gas prices.

Last week a report for British Gas owner Centrica said gas bills could rise to more than £1,000 early in the next decade.

What next?

The EDF price rises were "on the cards" said Mr Wolfenden, of Uswitch, but he said that their advice was different from when prices went up on previous occasions.

He said customers should study options to cap bills, as this was not going to be the last of any price rises.

"Fixed or capped price plans could be a lifeline for those who are more vulnerable to price rises," he said.

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EDF Chief Operating Officer Eva Eisenchimmel

"These plans carry a premium, but if you've never switched before you will probably still save money immediately by moving to one. However, the best fixed and capped deals are disappearing fast so consumers need to act quickly."

He said they should also embrace energy efficiency measures in the home.

Adam Scorer, of watchdog Energywatch, also said there would be more pain for consumers to come.

He called on the government to think again about its strategy on tackling fuel poverty which he described as "inadequate".

It should also speak with the European Commission to break the link between wholesale energy costs and oil prices.

Gordon Lishman, director general of Age Concern, said fuel vouchers should be introduced for the poorest pensioners, social tariffs should be made compulsory, and customers on pre-payment meters should not be charged more.

Story from BBC NEWS.