Power companies turn up fuel bills

Npower’s announcement that it will raise gas and electricity prices by 8.8 per cent and 9.1 per cent respectively follows the earlier confirmation from British Gas that price rises will add an average £80 to household fuel bills.

On Monday, Scottish and Southern Energy, which operates under the Swalec, Scottish Hydro and Southern Electric brands, is expected to announce a 9 per cent average increase in fuel bills, hitting about five million electricity and 3.4 million gas users.

British Gas, owned by Centrica, blamed rising costs for the increase in prices for customers. The company said the average dual fuel bill will increase to £1,238.

Phil Bentley, chief executive of British Gas, said: “Britain’s North Sea gas supplies are running out, and British Gas has to pay the going rate for gas in a competitive global marketplace.

“Furthermore, the investment needed to maintain and upgrade the national grid to deliver energy to our customers’ homes, and the costs of the government’s policies for a clean, energy-efficient Britain, are all going up.”

However, three months ago the company reported that profits in its residential division for the first half of the year were up 23 per cent. The price hike will affect around 8.5 million households.

Grow out of recession

Mr Bentley added: “Unfortunately, we cannot run our business sustainably on lower margins and still make the investments in jobs and future energy sources that Britain needs, especially if the country is to grow its way out of recession.”

British Gas put gas and electricity tariffs up by 18 per cent and 16 per cent respectively in August 2011, blaming higher wholesale costs, but this was followed by a drop of 5 per cent in electricity tariffs in January when prices eased.

Ann Robinson, director of consumer policy at uSwitch, said the increase would leave many households facing a winter where they are “scared to turn on heating for fear of the cost”.

Citizens Advice chief executive Gillian Guy said: “Many British Gas customers will find the possibility of a price rise really frightening. Bill increases throw already stretched budgets into turmoil – with people forced to find more ways to scrimp and save.”