View the article online at http://citywire.co.uk/money/article/a516647
Npower hikes gas prices 16%
Npower is the fifth of the 'Big Six' energy suppliers to hit customers with a double-digit energy price rise in the last two months. The energy giant is also increasing its electricity prices 7.2%.
Npower today announced plans to hike its gas prices by 15.7% and electricity prices by 7.2% on 1 October. The news comes less than a week after the energy giant’s parent company RWE announced a 130% increase in profits for the first half of 2011.
Dual fuel customers – people who have a combined gas and electricity energy tariff – will see their bills increase by 12.2%. This will increase bills for customers by an average of 37p per day. According to price comparison website uswitch this will add an extra £133 onto an average annual bill, bringing it from £1,149 to £1,282.
Kevin Miles, chief commercial officer of npower, 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,' he said. '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’.
Richard Lloyd, executive director of Which?, said: ‘This price hike will make consumers yet again question what’s happening in our energy market, especially as npower’s parent company has just announced a 130% increase in profits for the first half of 2011’.
‘The Bank of England has predicted that rising utility bills will drive inflation to 5% by the end of the year, which will put more pressure on already squeezed households,’ he added.
Npower’s German parent RWE announced its British operations made operating profits of €352 million (£309 million) in the six months to June 30, 130% higher than the €154 million from the same period last year. Shares in RWE were down 1.99%, or €0.56, to €27.53 on Tuesday afternoon.
Npower is the fifth of the six big energy suppliers to hike its prices in the last two months. Scottish Power was the first to raise its prices at the beginning of this month, quickly followed by British Gas, Scottish & Southern Energy and then E.on. Npower today stressed that its increase is the lowest announced by any of the major suppliers yet.
EDF Energy is the only supplier yet to follow suit, but is expected to announce a price hike soon.
Earlier today EDF was forced to apologise to 100,000 customers after it emerged the power company had over-billed them by nearly £200,000 between October 2003 and May 2010. EDF said it will be contacting all of the customers affected, and that in the majority of cases people were overcharged less than £5.
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