Npower have just announced a price hike of 9.8% or £109 a year for their customers on dual fuel bills. From 16 March, the ‘big six’ energy provider will raise electricity prices by an average of 15% and gas prices by 4.8%. Those on fixed-term deals will not be affected.
1.4 million households will be affected, and people are understandably angry at the lack of what they consider a reasonable explanation. Ofgem has said it sees no obvious reason why costs should be passed on to consumers and that Npower should have to justify this.
Npower have claimed the price rise is due to wholesale gas and electricity costs and the added costs of delivering new government policies such as the rollout of smart metering. However, people have pointed out that energy providers can buy their energy up to 2 years in advance to avoid being affected by sudden price hikes. It has also been suggested that while big energy companies are happy to increase rates when global energy prices rise, but don’t rush to do the same when wholesale prices are low!
Npower’s is the largest single rise from a big six supplier since 2013, and it shows that it is becoming more important than ever to shop around when it comes to energy tariffs/providers. Experts have said they expect the other big six firms to follow suit and rise their prices by 5-10%.
The Government have commented that it expects energy companies to consider their customers and treat them fairly, and that they are ‘prepared to act’ if they do otherwise. We wait to see what – if anything – this action will consist of!