The Bank of England’s recent warnings that consumers will face energy bill increases in early 2013 appear to have come to fruition early with SSE’s announcement of a 9% increase in gas and electricity prices.
The news comes roughly a year after a rise of 14% was announced, and is set to affect more than 8 million households.
The hike in energy prices, which will start on 15 October, was blamed on a number of factors including higher costs for distributing energy, government-imposed schemes and more expensive wholesale prices. Wholesale levels determine roughly half of SSE’s energy bills.
Although SSE is the first of Britain’s Big Six energy suppliers to confirm a rise in tariffs, Centrica, EDF Energy, RWE npower and Scottish Power are expected to follow suit. E.ON has promised not to increase tariffs until the end of the year.
“We expect other suppliers to follow suit ahead of the peak winter period,” said Tina Cook, analyst at Charles Stanley investment management company,” said Tina Cook, analyst at investment management company Charles Stanley.
“Upward pressures on the cost of supply, which include non-commodity costs, make tariff increases necessary to protect supply margins in what remains a challenging operating environment.”
SSE has said that those customers on dual fuel deals paying by direct debit will see their energy bills increase by £102.
“Public service workers – many of whom have not had pay increases for nearly three years – may find that it is not just their pay that is frozen when they are struggling to heat their homes as a result of these outrageous increases,” Mike Jeram, from trade union Unison.
SSE has made assurances that prices won’t increase again until the second half of 2013, and said tariffs would be reduced if possible.