Npower hits million British energy customers with price hike

(Adds details on industry, scrutiny)

By Sabina Zawadzki

LONDON, May 11 (Reuters) - Npower will raise domestic fuel costs for one million British customers, saying its standard variable dual fuel price for gas and electricity would increase 5.3 percent from mid-June.

Friday's price rise announcement comes despite intense political scrutiny of energy bills and follows hikes by Centrica (Frankfurt: A0DK6K - news) -owned British Gas, Iberdrola (Amsterdam: ID6.AS - news) -owned Scottish Power and EDF Energy, part of France's EDF (Paris: FR0010242511 - news) .

Innogy-owned Npower's price rise means customers on its dual fuel tariff who pay by direct debit will have an average energy bill of around 1,230 pounds ($1,664) a year.

The rise is made up of an average rise of 4.4 percent on gas and 6.2 percent on electricity, Npower said in a statement.

"The price change largely stems from increases in policy and wholesale energy costs, which are widely acknowledged to have continued to rise since Npower implemented its last price change in March 2017," it added.

British gas prices have become more volatile and experienced a huge spike during a sudden freeze in late February, in part due to the closure of a large storage site which acted as buffer during cold months. Baseload power prices are broadly higher this month than a year ago too.

But the wholesale price constitutes less then half of retail prices. Other charges, some policy-driven to encourage a switch to renewable fuels, make up the rest.

Britain's dominant energy companies, which also include E.ON and SSE Plc (LSE: SSE.L - news) , face price caps on the standard variable tariffs which the government plans to implement in time for winter, as well as fierce competition from smaller rivals.

The government has said British energy prices are a "rip-off" after it emerged household bills have doubled over the last decade, despite a series of market liberalisation reforms. (Reporting by Sabina Zawadzki, editing by Oleg Vukmanovic and Alexander Smith)