Another Big Six energy provider is raising its prices – this time its ScottishPower.
The utility firm said more than a million customers will be affected by the rises. Dual fuel prices will increase by an average of 7.8 per cent, electricity prices will jump 10.8 per cent and gas prices will raise 4.7 per cent.
ScottishPower blamed the hike on the growing cost of wholesale energy and compulsory non-energy costs, like the upgrade to smart meters.
On the other hand, Centrica-owned British Gas said it will extend its price freeze until August as it has managed to “significantly” reduce its own costs.
Last week, Npower said it would hike standard tariff rates by about 9.8 per cent, or £109.
ScottishPower said a third of its customers, or 1.1m people, will be hit by the price increases. It added prepayment customers will not be affected but will see “separate changes” as Ofgem’s price cap is rolled out.
“This price change follows months of cost increases that have already led to significant rises in fixed price products that now unfortunately have to be reflected in standard prices,” said Colin McNeill, UK retail director. He added ScottishPower will “continue to work hard to move even more customers to our fixed price deals”.
A spokesperson for energy watchdog Ofgem said there is no case for significant price increases on standard variable tariffs where suppliers have bought energy in advance. “However, there may be particular factors affecting individual suppliers. If this is the case, they need to justify to their customers why prices are going up, or risk losing customers as a result.”
McNeill said the company will write to its customers to encourage them to take up fixed price deals, and the customer service department – which has previously been fined for poor service – will stop sales activity for a week to spend the time making sure customers are on the best possible deals.
“With Scottish Power joining Npower and EDF, it’s now very clear the rest of the big six will follow suit at some point,” said Martin Lewis, founder of MoneySavingExpert.
Lewis called the British Gas price freeze a “sticking plaster” and said barring any changes to the world market, it’s “virtually unthinkable” that a rise won’t happen eventually.
Alex Neill, managing director of home and legal services for consumer group Which, said lack of competition in the market is hurting millions of consumers. “If energy companies fail to properly engage with their customers, then the government and the regulator must step in,” he said.