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Consumers are being warned to expect more price rise misery, as energy companies may be forced to make a second round of price rises. The predicted rise of up to 10% or £105 by the end of the year, comes as a result of the rising cost of gas on the forward market and will pile yet more pressure onto households, says uSwitch.com, the independent price comparison and switching service.
It will force household bills up from an average of £1,048, following Scottish and Southern Energy's announcement yesterday, to £1,153 - £241 more than the average of £912 at the beginning of 2008.
The prospect of higher prices will rankle with customers. Straight after having increased energy bills by an estimated £1.5 billion for UK households, consumers saw a steady procession of big profit announcements from the energy companies. British Gas alone made £571m in profits - a six fold increase on the previous year.
Scottish and Southern Energy is the last of the big six suppliers to put prices up - completing a first round of price increases that npower kicked off on 5th January.
While other suppliers followed in quick succession, Scottish and Southern Energy made a pledge to its customers that it would not implement any price rises until at least the end of March. This guarantee allowed its customers to continue to enjoy lower prices for three months. However, the first round of price hikes may not have been enough.
The price of gas on the forward market for next winter is 22% higher than it is at present, making the cost of procuring energy more expensive for suppliers. As seen earlier this year, this rise in costs is unlikely to be absorbed by the energy companies alone. Consumers can expect to bear some of the costs through increased household bills.
With all six major providers having announced price increases this year and more hikes predicted to be on the way, consumers will be looking to shield their household budget from any further blows. The good news is that energy suppliers are still offering their most competitive deals online. Consumers could still save £187 on average by switching from a standard energy plan to an online alternative.
Currently, fewer than 1 in 5 energy customers (19%) are on an online tariff, despite the obvious cost benefit. Sceptics would argue that it is in the energy companies' best interest for these numbers not to increase as it enables suppliers to appear competitive at little cost - offering cheaper prices on the tariffs with the lowest take-up while keeping the majority of customers paying over the odds.
Tim Wolfenden, Head of Home Services at uSwitch.com comments: "If you are still on an expensive standard energy plan or on a pre-payment meter then your supplier will be reaching more deeply into your pockets than it would be if you were on an online plan. There are still savings of up to £325 to be made by switching. So, check out the options, make sure you are getting the best deal for your household and try to reduce energy usage. In a time of rising prices this will be your best hope."
Here are the major providers and how much they have increased bills by since the start of the year:
