Energy supplier npower has announced increases to its gas, electricity and dual fuel bills, to be introduced from this autumn.
Dual fuel npower customers will have to pay an extra 12.2% for their combined gas and electricity bills from 1 October this year, while electricity customers will see a 7.2% increase to their bills. Gas bills will go up by 15.7%.
npower is the fifth of the big six energy suppliers to up its prices in less than 12 months. Only EDF energy has yet to announce further hikes.
Why the increase?
Richard Lloyd, executive director of Which?, says: "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. Given such healthy results, people are bound to wonder why their domestic bills have to go up this much."
Chief commercial officer of npower Kevin Miles admits the price hikes "hurt everyone" and says he wishes the energy provider didn't have to push up costs: "Although our half-year profits were better than last year they do not begin to match the billions of pounds we are investing in energy for the future."
He cites the reduced North Sea gas supply, which is forcing UK energy providers to buy energy from pricier global markets as one of the reasons for price increases being passed on to the customer.
"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," he adds.
Meanwhile, Lloyd at Which? warns that energy company price hikes are also adding further pressure to inflation figures. He says the consumer prices index (CPI), which is currently 4% and already 2% above the Bank of England's target, could rise to 5% as a result.
"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.
"It's critical that npower and all suppliers do more to help customers cut their energy bills - whether that's by getting onto the cheapest tariff or making their homes more energy efficient," Lloyd adds.
Compare energy prices and switch provider
npower is launching a new fixed deal, which covers customers for the next two winters. New and existing customers that apply for this rate will also receive a one-off £20 fuel bonus, (or £40 for dual fuel customers,) which will be credited to their first bill.