E.On, the energy supplier, have announced that they are increasing the cost of gas by 18% and the cost of electricity by 11% from 13th September this year.
This announcement has followed the recent trend in price rises started by British Gas earlier this summer. Scottish Power and Scottish and Southern Energy have already announced similar cost increases; E.On are now the fourth major energy supplier to follow the trend.
Out of the remaining big energy suppliers, only EDF and Npower have not announced similar increases to the costs of their utilities, but are soon expected to do so.
These increases have added to growing fears that fuel poverty is on the rise. Approximately 20% of UK homes now spend over 10% of their household income on fuel bills.
The wholesale cost of energy has risen by approximately 30% since last year. Like the other companies who have announced similar rises, E.On have suggested that they have to increase the prices they charge their customers in order to maintain their profits. Graham Bartlett, a spokesperson for E.On, said: “Uncertain times have had a huge effect on wholesale prices, with events in Japan and Libya all having a dramatic effect on gas and power prices in a relatively short period of time.”
The consumer group, Consumer Focus, are calling for action from Ofgem, the energy regulator.
They have suggested that whilst the wholesale cost of energy has risen by 30% this year, these wholesale prices are still approximately 33% lower than they were in 2008. Furthermore, wholesale energy costs have been falling since March this year and are predicted to continue falling.
Experts suggest that energy companies are urging customers to fix their tariffs for the year before more price rises take hold. However, if the wholesale costs of energy continue falling, many customers could find themselves caught out in long term and high price agreements.
Mike O’Connor, the chief executive for Consumer Focus, has indicated that consumer prices are now at an all -time high, even though wholesale energy costs have fallen since 2008. He has suggested that Ofgem need to determine whether these price rises are fair. If they are unable to do so, they must consider referring the issue to the Competition Commission.
There are approximately 5 million E.On customers who will be affected by this price rise.
Uswitch, the price comparison service, confirmed that E.On’s customers have now had a 22% increase in in bills this year, as they had previously announced a 3% increase in gas bills and 9% increase in electricity in February this year. On average, E.On customers have had an increase of £232 to their utility bills to an annual bill of £1293.
E.ON have confirmed that they are offering help to their customers to try to accommodate the rise in their utility bills. They are able to advise customers on home insulation and the installation of solar panels for £99.