Challenger energy provider Ovo has hiked the price of its variable tariffs by well above the rate of inflation.
Ovo customers on the ‘Simpler Energy’ standard variable tariff (SVT) with the online discount will see the £60 discount cut. This, combined with a price rise of 6.5%, amounts to a total increase in bills equivalent to 12.4% or £135 on average from 12 October.
Those on the Simpler Energy tariff without the online discount will have a 6.5% price rise.
This means that customers on both plans will be paying a total of £1,225 annually on average from 12 October onwards.
This is the second price rise form Ovo this year, following a 5.1% hike in June.
The news comes after Bulb said it was raising prices by 11.1% in November.
Taking a similar position to Bulb, Ovo blamed the rise on wholesale energy costs going up by 15% since last June.
In a statement on its website Ovo says: “Wholesale energy costs have risen by over 15% since June, as a result we’re increasing our variable plan rates and removing the online discount from our variable plan.
“We review our prices every week to ensure we’re giving our customers a fair deal that reflects the real cost of energy and continue to make all our decisions as if our ‘customer is in the room’ with us.”
Earlier this month, British Gas announced its second price rise this year, which will take the typical standard variable tariff bill to £1,205 a year.
E.on, SSE, Npower, EDF and Scottish Power have also introduced price rises this year.
Stephen Murray, energy expert at MoneySuperMarket, says the decision by Ovo highlights benefits that switching and fixing your energy tariff can bring.
He says: “Whilst the percentage of Ovo customers on standard variable tariffs is relatively low, this increase is in stark contrast to customers who switched to the brand’s two-year fixed deal this time last year.
“Those customers are now sitting on a deal that is almost £100 cheaper than the current cheapest deal on the market, and still have a further year of protection to come at rock-bottom prices.
“With all indications that prices will continue to increase this winter, now is the time to switch to one of the many competitive fixed-rate tariffs on the market. The price you pay will be secured for the next 12 months – or 24 if you go with two-year fixed tariff – and you will save £250 or more on your bills.”
Hi David, thanks for spotting that, the error has been corrected. It should say annually!