Yahoo Finance E.ON to increase prices for 1.8m customers in second rise this year
E.ON will hit nearly 2m households with a 4.8% price rise, as it became the first of the big six suppliers to put up energy bills for a second time this year.
Some of the German firm’s customers had already been struck in April with a stealth increase of up to £50. The new price rise adds a further £55 a year for a typical dual fuel customer from 16 August.
However, the second rise is thought by industry sources to be limited to E.ON and unlikely to mark the start of a new round of price hikes by other suppliers.
E.ON blamed higher wholesale energy costs, which it said had increased by more than a fifth since its last big price rise in 2017.
Michael Lewis, the E.ON UK chief executive, said: “A number of costs have risen quite sharply and in particular we’ve experienced a hike in the price we have to pay for the energy our customers need, partly driven by the beast from the east and extreme weather conditions experienced earlier this year.”
A customer with typical energy consumption will now face an annual bill of £1,208 after the rise.
Victoria Arrington, a spokesperson for comparison site Energyhelpine, said: “This new rise is a bitter and expensive pill to swallow.”
The timing of the rise risks creating a political backlash, as the energy regulator Ofgem is bringing in the government’s cap on standard variable tariffs by the end of the year. Labour accused E.ON of wringing a profit from consumers ahead of the cap.
“Worryingly E.ON seems to be attempting to squeeze in as much profit as they can before the Tories’ half-baked price cap is finally introduced later this year after over 12 months of procrastination,” said shadow business secretary, Rebecca Long-Bailey.
E.ON said it was contacting customers to suggest they switch to cheaper fixed tariffs, and offering them measures to improve the energy efficiency of their homes.
Wholesale power prices usually fall in summer as demand is lower. But this year they have stayed relatively high because gas stocks are being replenished after they were heavily depleted during the cold snap at the end of winter.
The costs facing suppliers rose by 5.3% between 1 February and 1 May, according to Ofgem’s index.
