Npower announces gas and electricity price hikes
Jan 5 2008 Western Mail
ONE of Britain’s biggest power companies yesterday announced price hikes of 17.2% for gas and 12.7% for electricity in a move set to hit more than four million households.
Npower said customers will see annual bills jump on average by £95 for gas and £64 for electricity under the price changes, due to come into effect today.
The price rises will push Npower’s average dual gas and electricity bills to more than £1,000.
Experts yesterday predicted that other energy suppliers will follow suit soon with prices rises of their own, spelling gloom for households this winter.
Npower – the UK’s fourth biggest energy supplier – blamed the decision to increase prices on steep rises in wholesale gas and electricity costs, which it claimed have risen by more than 60% since the middle of last February.
It added that gas distribution costs had also contributed to price pressures and Npower announced yesterday that its gas prices will vary regionally for the first time to reflect gas transportation costs.
The change will mean gas price rises vary from 15% to almost 24% for some Npower customers. London and the East Midlands will be hit with the highest increases, with some single fuel customers suffering a 23.8% rise.
Parts of Wales and Scotland will see their bills rise by the smallest amount.
Npower said competitors Scottish Power and Scottish and Southern have already introduced regional gas prices, while British Gas announced last year that it was set to switch to the new tariff structure soon.
Electricity prices already vary across the regions and Npower said prices will rise from 8.7% in areas in Wales and Scotland, up to 27% for some customers in the East Midlands.
Giuseppe Di Vita, managing director of Npower’s residential business, said, “This decision was not an easy one. We always try to protect our customers for as long as possible, but sadly higher energy prices are a fact of life.
“Npower is not alone in facing these higher costs, and we expect other suppliers to follow suit very shortly. Anyone struggling to pay their bills, regardless of the time of year, should get in touch immediately.”
Npower, which is owned by German company RWE, has already increased its online tariff for new customers, upping bills by 17% the week before Christmas.
British Gas parent Centrica also last month announced increases to its market tracker price, increasing bills by 13% for gas and 15% for electricity.
It also warned less than two weeks later that wholesale prices left the energy industry facing a “difficult environment” in 2008, signalling that prices were set to rise across the board.
Energyhelpline.com yesterday forecast the UK’s other five major suppliers would increase prices by around 15% in the next two months.
Chief executive Paul Green said, “Market conditions are similar to those in 2006 when we saw multiple price rises. This year we can expect customers to see between two and three price rises in the course of the year due to volatility on the wholesale markets.”
Wholesale gas prices have been driven up by soaring oil costs.
Independent gas and electricity consumer watchdog energywatch has attacked Npower’s move.