Energy firms hike prices

7:17pm Thursday 21st August 2008

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Two of the UK's "big six" energy firms hiked gas and electricity prices - adding to the misery for millions of hard-pressed households.

Scottish & Southern Energy, which has 8.8 million UK customers, is raising gas prices by 29.2% and average electricity costs by 19.2% from Monday.

Rival E.ON also unveiled rises of 26% and 16% in gas and electricity prices respectively. Both firms blamed soaring wholesale energy prices.

The price hikes follow similar moves from British Gas and EDF last month. This leaves just npower and Scottish Power as the remaining major energy firms who have yet to raise prices.

SSE, the UK's second largest supplier, said the average dual fuel customer would see annual bills rise by £253 a year to £1259. It is the second hike its customers have faced since April.

E.ON's hikes will see customers who take both gas and electricity pay £1226 - an extra £227 - although this is an average of those paying by monthly direct debit and those who pay bills quarterly and includes prompt payment discounts.

SSE's energy supply director Alistair Phillips-Davies said: "The world is experiencing an energy shock of a kind not seen since the early 1970s, but which is likely to have more profound and lasting consequences."

The increases would have been even higher but for the fact wholesale prices had fallen slightly in recent weeks, the firm added - although more vulnerable customers would not face higher bills until at least the end of the winter period.

SSE, which owns Southern Electric, Swalec and Scottish Hydro Electric, said its forward wholesale prices had jumped by 50% for electricity and 60% for gas between February and July.

E.ON has 5.5 million UK customers. Graham Bartlett, the managing director of its retail business, said: "This was not an easy decision to make and we've tried to keep these increases as low as possible while protecting as many of our customers as we can."

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