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Scottish and Southern are the last of the big six to raise prices |
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All of the major suppliers have now raised their domestic prices this year.Millions of residential customers with Scottish and Southern Energy will face price rises of up to 16% from April 1, after the firm became the last major player to raise prices this year.
Scottish and Southern said the average dual fuel customer would see costs rise to £1,066 a year. The company had previously stated that it would not raise its prices before the end of March, while its rivals were busy hiking prices at the start of the year. They blame rises in wholesale energy costs for the move, stating that wholesale electricity costs have risen 90% compared to March last year, while wholesale gas costs have doubled in the same period. "Energy supply in the UK is changing dramatically, with companies having to operate in volatile markets, which reflect depletion of North Sea oil and gas fields, soaring global demand for all types of energy and over $100 a barrel for oil," said Alistair Phillips-Davies, energy supply director of SSE. "These pressures are compounded by the rising transmission, distribution and environmental costs which suppliers have to meet. "You cannot resist indefinitely the impact of these issues and I am sorry that all of this has culminated in the price rises we are announcing." Scottish and Southern says that its prices remain the lowest in the UK, and that waiting until the start of the summer to raise prices had already saved customers an average of around £44 so far this year, when compared to British Gas. Scottish and Southern have over 8 million customers and also operates under the Southern Electric, Swalec and Scottish Hydro Electric brands. Npower was the first of the big six to raise prices at the start of January, followed quickly by British Gas and EDF Energy. ScottishPower and E.ON raised prices in February. The average combined electricity and gas bill for a UK household is now over £1,000 per year. Recent studies show that higher energy bills across the country are pushing up inflation at a significant rate, as the impact of the rises is not spread out over time. This has led to inflation rising to 2.5% in February from 2.2% in January, with some analysts predicting further rises of up to 2.8% in March. The annual rate of 2.5% is above the government's target of 2%, highlighting the challenges facing the Bank of England of tackling rising inflation as the economy slows. "Although higher, this is no worse than markets expected," said Michael Saunders, economist at Citigroup. "Nevertheless, the Bank of England will remain worried about the effect of rate cuts with high and rising inflation," he said. Jonathan Loynes at Capital Economics said: "Inflation concerns will continue to limit the Monetary Policy Committee's ability to respond to the downturn in the economy."
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Prices
for electricity customers will increase by an average of 14.2%, while
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