npower raises energy prices, but at a lower rate than ‘Big Six’
npower has become the fifth member of the 'Big Six' to announce energy prices rises, with just EDF Energy yet to release price changes.
Energy giant, npower, said this morning (August 16), it will be increasing its standard dual fuel prices by 12.2%, an increase of 37p per day, or around £134 per year, from October.
According to npower, the new rates are on average £30 per year cheaper than its rival British Gas, which has increased its prices by 34%.
The rises, while not in line with the UK’s current rate of inflation which is 4.4%, make npower the lowest increases so far with only EDF left to reveal costs.
By comparison, Scottish Power and SSE have announced they will raise prices by 29%, and Eon by 29.5%.
For single fuel npower customers, the average increase will be 15.7% for gas and 7.2% for electricity.
npower said the price increase was regrettable, but escalating costs of the global wholesale market was partly to blame.
It also said it needed to increase costs in order to continue investing in energy in the future.
npower’s chief commercial officer, Kevin Miles, said: “I know it hurts everyone when we put up prices and I wish we didn’t have to. Although our half year profits were better than last year they do not begin to match the £billions we are investing in energy for the future.
“With reduced quantities of North Sea gas, we are now forced to buy energy on the volatile global wholesale market. World events have pushed up prices and we believe this trend will continue.
“In the UK we have also seen rising distribution and network charges, and further environmental costs but we have still managed to keep our increases lower than those announced by any other major supplier”
Responding to npower, industry watchdog Consumer Focus, said though the increases will not come as a surprise to npower customers it would still be a “great source of frustration”.
Its director of external affairs, Adam Scorer, said: “With wholesale costs around a third lower than their peak, understandably people are questioning whether it is right that customers face all-time high prices.
“Energy markets may be complex to understand, but for many consumers they just defy all common sense.”
Consumer Focus is now calling for greater pricing transparency, clearer tariffs and the introduction of new measures to increase the number of suppliers in the energy market.
Scorer added: “Investment in cleaning up our energy supply is essential, but as this is set to raise bills even further, it is even more important consumers get clear and open pricing.
“Ofgem has said it will be putting firms under closer scrutiny to make sure that the market is fair, open and competitive. However if it can’t guarantee that consumers are getting a fair deal after these reforms the regulator must refer the energy market to be investigated by the Competition Commission.”
© Faversham House Ltd 2022 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.