More evidence that energy price hikes are not far away

Wholesale energy prices, which have been increasing steadily, caused British Gas to raise the price of its ‘tracker’ tariff last week. Today, npower followed suit by announcing that its wholesale price tracker would rise by 17 per cent for gas and 13 per cent for electricity.

While no suppliers have yet increased prices on their standard or online tariffs, British Gas owner Centrica warned today that, “the high wholesale prices will, if sustained, create a more difficult environment for retail energy suppliers in the UK going into 2008”, adding, “we will continue to monitor this with regard to future pricing policy."

Karen Darby from SimplySwitch, the price comparison and switching service, comments: “Historically, when one of the big suppliers increases prices, the others are quick to follow. Many analysts are now predicting price rises of around 15 per cent early on in 2008. If this happens, customers will be forced to pay an extra £131 per year in energy bills*. With petrol prices rising, the cost of mortgages still high and the inevitable financial hang-over from Christmas, householders will really feel the pinch early in the New Year.

“Fortunately, for those wishing to protect themselves from price rises, there are still some highly competitive capped deals available. In the past, capped deals were expensive, with customers paying way over the odds for the added peace of mind. Now, however, some capped tariffs are almost as cheap as the UK’s best online deals and charge no penalties if the customer wishes to leave.”