Eon announces hike in standard variable electricity and gas

Consumer groups reacted with fury today after E.ON’s hard-pressed customers learned that they would face a second energy price hike in four months.

The energy giant is increasing the cost of its standard variable tariff by an average of 4.8 per cent – £55 for customers taking both fuels – from August 16.  

The increase was described by energy consumer groups as a ‘kick in the teeth’ and ‘a bitter and expensive pill to swallow’, as they urged consumers to get on fixed tariffs.  

Energy giant E.ON is raising the cost of its standard variable tariff by an average of 4.8 per cent

E.ON’s announcement – which blamed the cold weather and Middle Eastern politics for the rises – follows Npower, EDF and British Gas also increasing their prices.

The unit price of E.ON’s standard variable EnergyPlan will rise by 6.2 per cent or £36 for electricity-only customers and 3.3 per cent or £19 for gas-only customers.

It comes after E.On put in a backdoor price hike in April  by scrapping discounts, resulting in an average £22 a year rise for households on its standard tariff.

E.ON last increased its standard unit prices in April 2017, but said it had seen increases of 22 per cent for wholesale energy costs since March this year.

E.ON UK chief executive Michael Lewis said the firm has faced 'a hike in the price we have to pay for the energy our customers need'

E.ON UK chief executive Michael Lewis said the firm has faced ‘a hike in the price we have to pay for the energy our customers need’

It attributed the latest increase ‘largely’ to the impact of the extremely cold temperatures earlier this year depleting European gas storage.

The company also put the rise down to Middle Eastern politics ‘which have caused prices to increase dramatically’.

It said the cost of policies such as the Renewables Obligation, Electricity Market Reform (EMR) and Feed in Tariffs (FITs) had also increased during this time.

But Victoria Arrington, a spokesman for energyhelpline, said: ‘Yet another price hike from a major supplier in 2018. 

‘This new rise is a bitter and expensive pill to swallow. The cost of sticking to a big-name energy supplier is quickly outstripping the feeling of safety it gives customers.’

‘It is another signal that the current energy market can be volatile. With dozens of active suppliers in the UK, there is more competition out there for big suppliers than ever.’

Stephen Murray, energy expert at MoneySuperMarket, added: ‘Today’s announcement by E.ON completes the full set of price rises by the Big Six suppliers, although we had thought that was already the case.

How much has your bill gone up? Big Six hikes in the last two months

E.ON – Up from August 16 by 6.2 per cent, adding an average £55 a year

British Gas – Up on May 29 by 5.5 per cent, adding an average £60 a year

Scottish Power – Up on June 1 by 5.5 per cent, adding an average £63 a year

EDF – Up on June 7 by 2.7 per cent, adding an average £28 a year

Npower – Up on June 17 by 5.3 per cent, adding an average £64 a year

SSE – Up from July 1 by 6.7 per cent, adding an average £76 a year

‘E.ON had removed some of their discounts in March, delivering an effective increase of £22 for dual fuel customers. However, they have now added further costs to consumers on their standard variable tariff to the tune of £55.’

And Claire Osborne, uSwitch.com energy expert, said: ‘Customers will be forgiven for thinking they had seen the last of the big six price rises this year so yet another increase from E.ON is a kick in the teeth for the million customers affected.’  

What are the price rises E.ON customers face?

Customers on the standard variable E.ON EnergyPlan for gas and electricity will see their cost rise by an average of 4.8% (£55) from August 16.

Electricity-only customers will see a 6.2% rise (£36), while gas-only customers face a 3.3% (£19) rise.

But E.ON UK chief executive Michael Lewis said: ‘We had hoped that, by making the structural changes we made earlier this year, impacting bills by around £22 a year, we could avoid an increase in our unit price.

‘However, as was seen in relation to the increases in the regulated prepayment cap in April, a number of costs have risen quite sharply and in particular we’ve experienced a hike in the price we have to pay for the energy our customers need, partly driven by the Beast from the East and extreme weather conditions experienced earlier this year. 

‘Through advanced purchases we had been able to shield our customers from some, but not all, of this impact. We’ll continue proactively to tell customers about the different tariffs on offer and encourage them to move to those tariffs, as well as promoting the different services that can potentially help bring their bills down such as a smart meter, a more efficient boiler or better insulation.’

E.ON's announcement follows Npower, EDF and British Gas also raising their prices

E.ON’s announcement follows Npower, EDF and British Gas also raising their prices

E.ON said it had contacted around 1.8 million standard variable tariff customers to advice them that cheaper tariffs could be available, and had seen a 21 per cent fall in the number of these accounts over the last 18 months.

E.ON added that it was committed to both improving customer engagement in the energy market and keeping prices as affordable as possible.

Average bills of Big Six energy customers

British Gas £1,161

E.ON £1,208

EDF Energy £1,158

npower £1,230

ScottishPower £1,211

SSE £1,196

BIG SIX AVERAGE £1,194

Data from energyhelpline based on average usage from Ofgem statistics

It will be writing to affected customers in the coming weeks to notify them of the change and will continue to work hard to offer choice and to advise customers of savings they could make on the cheaper tariffs available. 

A Government-enforced price cap is set to be introduced on standard variable tariffs (SVTs) later this year.

It comes as a report claimed last night that filling stations are overcharging drivers by at least £2.50 per tank.

It said retailers had hiked the cost of petrol and diesel by more than 5p a litre since early May when wholesale costs have risen by only a fraction of a penny. Over the past three months pump prices have surged by roughly twice the wholesale rate.

This has handed retailers a £500million windfall, according to the research by FairFuel UK. Drivers are paying £2.50 extra for filling up a typical 50-litre tank. 



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