MILLIONS of Scots face a winter of rising fuel bills, as two of the UK’s largest energy suppliers confirmed that they are to increase gas and electricity charges.
• 6 % Scottish Gas increase will come into effect next month
• npower prices will increase by an average of 8.8% for gas and 9.1% for electricity from next month also
• Annual dual fuel bill for British Gas customers with average consumption will increase by around £80 to £1,238
• Profits up at Centrica-owned firm by 23% this year
Energy company npower announced today that prices will increase by an average 8.8% for gas and 9.1% for electricity from November 26 while British Gas announced this morning that prices would rise by 6%
A total of 8.5 million British Gas households will be hit by the move, although another one million of the firm’s customers on fixed price contracts will be unaffected.
British Gas managing director Phil Bentley said rising costs, that are largely outside its control but which make up most tariffs, were to blame.
Mr Bentley said: “Britain’s North Sea gas supplies are running out, and British Gas has to pay the going rate for gas in a competitive global marketplace.
“Furthermore, the investment needed to maintain and upgrade the national grid to deliver energy to our customers’ homes, and the costs of the Government’s policies for a clean, energy-efficient Britain, are all going up.”
About 1.5 million homes in Scotland could be hit by an average £100 hike in annual energy bills from Scottish Gas.
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Scottish Gas put gas and electricity tariffs up by 18 per cent and 16 per cent respectively in August 2011, blaming higher wholesale costs, though this was followed by a drop of 5 per cent in electricity tariffs in January.
The increase in energy bills will hit households already struggling to cope with soaring fuel prices and rail fares, in the face of widespread pay freezes and cuts to welfare budgets.
Reports of the looming price rise yesterday triggered stinging criticism, particularly after the company’s first-half profits rose 15 per cent to £1.45 billion. That equates to almost £8m a day.
Campaigners warned at least a third of Scots were having to choose between heating and food, running up personal debt to pay energy bills and putting their own and their children’s health at risk by rationing.
A 9 per cent increase by Scottish and Southern Energy (SSE) will come into effect on Monday next week, and other major suppliers have refused to rule out a similar rise.
Financial squeeze
Consumer groups have warned Scottish Gas’s 6 per cent price hikes will throw households’ already stretched budgets into “turmoil”.
They say it is the lastest blow for families already squeezed by increased mortgage costs after a string of lenders increased their standard variable rates (SVRs) in recent months, affecting more than a million home owners.
Santander’s hike to its SVR last week meant a few hundred thousand of its customers saw an average increase of £26 a month for a £100,000 mortgage.
Food prices have also been predicted to rise following poor harvests due to the wet British weather.
Citizens Advice chief executive Gillian Guy said: “Many British Gas customers will find the possibility of a price rise really frightening.
“Bill increases throw already stretched budgets into turmoil - with people forced to find more ways to scrimp and save.
“But there are things that people can do to save money on their fuel bills.”
Profits
Tom Greatrex, Scottish Labour energy spokesman, said: “People will not understand why Scottish Gas are putting prices up, despite their interim financial report showing profits on UK residential customers being up by 23 per cent, compared to the same period last year.”
Only one of the big six energy suppliers was able to rule out a rise before the start of winter. Both ScottishPower and EDF energy said their rates were under “constant review”.
E.on has promised it will not raise prices in 2012, but could make no guarantees about the start of next year, while Npower said it would not comment on future changes.
John Robertson, MP for Glasgow North West, who also sits on the energy and climate change committee, said: “I find it deeply disappointing that the energy barons are up to their usual tricks. They simply do not care about the hundreds of thousands of people who will suffer as a result of their mindless greed.”
A Scottish Government spokeswoman said: “The Scottish Government is well aware that energy price rises have an extremely damaging effect on the finances of Scottish households.
“For every 5 per cent price increase in energy prices, 46,000 households are pushed into fuel poverty.”
She added: “Worried households can contact 0800 512 012 for assistance.”