E.ON customers hit by energy price hikes

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Energy provider E.ON has today announced it will be increasing its energy prices. Electricity prices will go up by 9% and 3% for gas. The increased prices will come into effect from Friday 4 February and it's expected that most residential customers will be affected.

This will add an extra £62 to the average annual E.ON standard dual fuel bill, which will increase from £1,187 to £1,249, according to comparison website uSwitch.com.

The energy provider claims the price hikes are due to rising industry costs and in particular the 35% increase in wholesale energy prices since last spring.

Read Rachel Lacey's blog: How I cut my energy bills in half

E.ON's managing director Graham Bartlett says it is over two years since the provider last increased its prices However, he admits the company now has "no option but to make this change".

He adds: "The rise will not be applied to E.ON's most vulnerable customers in WarmAssist for which there are no current plans to increase this tariff. For Age UK customers, the price rise is delayed until April 2011."

Ann Robinson, director of consumer policy at uSwitch, calls E.ON's decision "another blow to British households".

She says: "The struggle to meet winter fuel bills just keeps on getting harder, not helped by the fact that we've just seen the coldest December for 100 years."

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E.ON's increase comes after four of the other major providers also announced energy price rises this winter. ScottishPower's increase took effect on 25 November, followed by SSE's hike at the beginning of December and British Gas on 10 December.

And at the beginning of January npower announced it was also pushing up prices.

Richard Hall, energy expert at Consumer Focus, says consumers no longer trust that suppliers are asking them to pay a fair price for their energy.

"With high prices, a complex market, and consumers being asked to pay billions of pounds to improve our energy supply, it is essential that confidence in energy prices is improved.

"Of the big six, only EDF Energy hasn't installed an increase, promising to freeze prices until March 2011," he says.

However, Robinson is cautiously optimistic about the outlook, predicting that if wholesale prices fall in spring, customers can expect to see some of the savings passed on to their gas and electricity bills. 

"There is a glimmer of hope that wholesale prices, which are the main driver behind price increases, will fall again in spring. If this happens consumers have every right to expect suppliers to be just as swift in cutting their prices back down again."

The energy watchdog Ofgem is currently investigating if the energy market is charging customers fair prices.

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