Energy firms announce big price hikes

Last Modified: 29 Aug 2008
Source: ITN

Scottish Power and npower have become the latest energy companies to announce inflation-busting price hikes blaming wholesale gas costs.

Scottish Power, which has 5.2 million customers, said gas prices will rise by 34 per cent while electricity bills will increase by 9 per cent from September 1. It blamed a 65 per cent jump in wholesale gas costs and a 45 per cent leap for coal since February.

It means average bills for dual fuel customers will increase by 25 per cent. The company said about 1.2 million customers have fixed-price tariffs and is now offering a new rate guaranteeing prices until December 2009.

Meanwhile, npower, the UK's fourth-biggest energy supplier with 6.6 million customers, said it is raising gas prices by 26 per cent and electricity by 14 per cent with immediate effect, meaning an average annual increase for customers of £162 for the former and £60 for the latter.

Npower said electricity generation had also been directly affected by the soaring price of raw materials prices, which had increased by 122 per cent for gas and coal and 79 per cent for oil over the last 12 months.

Managing director Giuseppe Di Vita said: "I'm sorry we've had to increase our prices, and we've made this decision extremely reluctantly, especially as household budgets are being squeezed so much at the moment.

"There is help available for people who can't afford to pay their bills and we want our customers to get in touch if they're worried."

Willie MacDiarmid, Scottish Power's director of energy retail, said: "These are difficult times and we understand the financial impact this announcement will have on our customers.

"Although we're one of the last companies to announce increases, we're sorry we couldn't hold on any longer. However, we have worked very hard to protect people for as long as possible from these considerable increases in the wholesale market.

"We have tried hard to keep electricity prices as low as possible and our increase of 9 per cent is the lowest in the sector. The continuing volatility in the global market for gas is directly contributing to increasing UK's domestic energy prices and Scottish Power is not immune to these rises."

The firms are the latest to hit households with steep hikes in gas and electricity prices in recent weeks, following moves by British Gas, EDF, E.On and Scottish & Southern Energy.

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