Britain’s fourth largest supplier of gas and electricity, Npower, yesterday announced huge new energy price hikes for its four million domestic customers.
The average increases are 12.7 per cent for electricity and 17.2 per cent for gas from today, 5 January.
The company statement claimed: ‘Npower has been forced to put up prices because the cost of buying energy on the wholesale markets has increased dramatically.
‘Since mid February 2007, electricity wholesale costs for 2008 have increased by 66 per cent and gas by 60 per cent.’
It added that along with ‘other significant cost pressures such as increased gas and electricity distribution and transmission costs’, the ‘spend to meet the government’s energy efficiency targets has doubled’.
The company predicted: ‘Today’s change in prices will mean the average annual price increase will be £64 for electricity and £95 for gas, across all payment methods.’
This brings in the spectre of over £1,000 a year bills.
In a small concession to its poorest customers Npower said: ‘Customers paying by pre-payment meters (PPMs) will see lower average price increases of 9.8 per cent for electricity and 15.7 per cent for gas.’
Giuseppe Di Vita, managing director of Npower’s residential business, warned that ‘Npower is not alone in facing these higher costs, and we expect other suppliers to follow suit very shortly.’
The GMB trade union condemned the rises.
GMB national secretary for the energy industry, Gary Smith said: ‘The GMB has consistently criticised the regulator, Ofgem, for its free market dogma that has delivered the highest prices in Europe to UK consumers for energy.
‘The government should sack the regulator and take over the job itself and be accountable to parliament for how it does the job.’
Mervyn Kohler, special adviser for Help the Aged, said: ‘Even a one per cent rise in fuel bills plunges around 40,000 people into fuel poverty – so rising fuel bills are bad news for a lot of older people.
‘When older people are living in fuel poverty they have to make very difficult choices, often between whether to eat or whether to heat their home.
‘Rising fuel prices and the government’s admission in early December that it is likely to fail to eliminate fuel poverty by 2011 means this is very worrying indeed.’
Consumer watchdog Energywatch also slammed the increases.
Energywatch spokesman Karl Brookes said: ‘Consumers are always being softened up with talk of “unavoidable” price rises.
‘The wholesale price for gas has risen, it’s true, but all suppliers can decide to absorb more of that themselves rather than pass all the rise on to consumers.’
Price comparison website uSwitch head of home services, Tim Wolfenden said: ‘By announcing price increases today, Npower has given the other suppliers the green flag they’ve been waiting for.’
Npower, a subsidiary of German company RWE, had already increased its online tariff for new customers, raising that by 17 per cent towards the end of last month.
l Share prices on the London stock exchange fell sharply, with the FTSE 100 index over 132 points down yesterday afternoon in the wake of huge falls in Tokyo and on Wall Street.
In New York, the Dow Jones Industrial index fell 134.3 points, or one per cent to 12,922.4 in early trading as government employment data heightened fears of a recession.
The US Labour Department’s report said that unemployment in December was at its highest level since November 2005.
