UK Economy: Rising UK Household Energy Bills
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July 26, 2008 – The gas and electricity bills for millions of British households are soon set to rise drastically, after the country’s biggest gas and electricity provider, EDF Energy, announced a hike in its electricity and gas prices on July 25. The hike will raise an average joint bill by more than £200 per year, or £4 a week, to £1,211 per annum, according to price comparison website uSwitch.com.
The company, which has more than five million residential and small business customers, said it is raising electricity and gas prices by 17% and 22%, respectively, with immediate effect. The company cited spiraling oil prices and record high wholesale gas prices as reasons for the price hike. EDF said that it had been absorbing the rising costs for some months, but had to ultimately pass on some of the costs to the consumers.
Following the price hike by EDF Energy, energy experts warn that other electricity and gas providers would follow suit. Industry experts also believe that EDF Energy and other electricity providers will be forced to hike their prices again in January, raising tariffs by 40% by the end of the year. Joe Malinowski, founder of TheEnergyShop.com, pointed out, however, that oil prices have retreated from their record highs achieved earlier this year and a second increase “might not have to be that big.”
uSwitch.com said a 40% rise would take the average dual fuel bill to £1,467 a year, accounting for 5% of the average household’s net income. Ann Robinson, director of consumer policy at uSwitch, said, “The days of cheap energy are over. Today’s move means we are another step closer to seeing the largest ever increase in household energy bills in one year – we are potentially looking at a 61% or £555 increase in total this year.”
An independent report commissioned by British Gas owner Centrica last week warned that gas bills alone could exceed £1,000 per annum within the next several years.
Alternatio Cirqui, EconomyWatch.com Energy Correspondent
