Customers of Co-op Energy will be hit with gas and electricity price hikes from 1 October, the provider has confirmed.
Those on a standard variable tariff will see prices rise by 3% on average. However, pre-payment customers – who pay for their energy in advance using a meter – will have their prices hiked by up to 6% on average.
Fixed-rate customers are unaffected for the term of their deal.
Co-op Energy is the first major energy supplier to raise its standard tariff prices since 2014, according to price comparison site uSwitch.
The move will add an extra £32 per year to Co-op Energy’s average standard dual fuel bill for those paying by monthly direct debit, according to uSwitch, which means prices will increase from £1,089 to £1,121 as a result.
For dual fuel prepayment customers, uSwitch says bills will rise by £69 per year on average, from £1,115 to £1,184.
In comparison, the cheapest tariff on the energy market for the average dual fuel user paying by monthly direct debit is £770, according to uSwitch.
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‘Other suppliers could follow suit’
uSwitch warns that the move by Co-op is worrying as it could lead to other smaller providers following suit.
Claire Osborne, energy expert at uSwitch, says: “This is a worrying warning bell that the wholesale price honeymoon may be drawing to a close.
“Wholesale prices are now climbing at the fastest rate in years, driven by upward pressure on the cost of energy imports from the falling value of sterling following the EU referendum, future supply concerns and higher transmission costs.
“Unfortunately, it’s the smaller suppliers who are less able to cope as they cannot buy their energy as far ahead as the Big Six. The danger is that other small suppliers could now follow suit and raise their prices – just in time for winter.”
‘We pass on savings where possible’
A spokesperson for Co-operative Energy says: “We do our best to protect customers from price rises and, wherever possible, pass on any savings we can, as we did by reducing our gas price in March of this year.
“In recent months, we have absorbed a 19% increase in environmental and social obligations costs as well as an increase in electricity and gas wholesale prices.
“Unfortunately, this is no longer sustainable and we have reluctantly taken the decision to pass on a small percentage of these costs to our customers by increasing our charges by an average of 3% from 1 October 2016.”