Some 3.3 million Npower customers were today facing higher energy bills after the company became the latest utility provider to hike its prices.
Average tariffs for gas will increase by 15.7% and electricity by 7.2% from October 1, Npower said, meaning the average monthly direct debit dual-fuel customer will see bills increase by 12.2% – an additional £134 a year.
The price hike comes at a time when household budgets are being stretched by the high cost of living and muted wage growth. Figures today confirmed inflation in July increased to 4.4% from 4.2% the previous month.
Npower is the fifth of the “big six” providers to announce a price hike, following Scottish and Southern Energy, Scottish Power, British Gas and E.ON. EDF is yet to announce changes to its tariffs.
The price hike is likely to provoke further outrage as it follows a stellar set of half-year results from Npower – which more than doubled its profits in the six months to June 30.
RWE, the parent owner of Npower, said its British operations made operating profits of 352 million euro (£309 million) in the period, up from 154 million euro (£135.2 million).
But Npower said its price rises were lower than its competitors and the company also introduced a new deal which fixes the new rates until March 2013, protecting customers who sign up for the next two winters.
Adam Scorer, director of external affairs at independent lobby group Consumer Focus, said Npower’s customers will have been “dreading this announcement”.
He said: “It will not come as a surprise, but it will be a source of great frustration when profits are up.
“It is welcome that these increases are lower than the rest of the big six but they will still be hard to swallow for hard-pressed consumers.”
Scottish Power lifted its bills on August 1, meaning that a dual fuel customer paying by direct debit saw prices rise by £173 to £1,206.
Scottish & Southern Energy has said its gas prices will rise by an average of 18% and electricity prices by 11% from September 14. The increase will mean a typical annual dual-fuel bill will increase from £1,094 at present to £1,265, an increase of £171.
British Gas is to raise its gas and electricity prices by an average of 18% and 16% respectively from Thursday, increasing the average dual fuel bill by £190 a year to £1,219.
E.ON said the average dual fuel bill for a customer paying with direct debit will rise by 15.2% to £1,190 from next month.
Kevin Miles, chief commercial officer at RWE Npower, said: “I know it hurts everyone when we put up prices and I wish we didn’t have to. 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.
“With reduced quantities of North Sea gas, we are now forced to buy energy on the volatile global wholesale market. 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, but we have still managed to keep our increases lower than those announced by any other major supplier.”
Courtesy of Jamie Grierson of The Independent Newspaper