TWO major energy companies will increase their prices for customers on New Year’s Day, amid warnings of further rises to come in 2006.
Scottish and Southern Energy will put up prices by 13.6 per cent — which will put about £50 on the average bill — and electricity charges by 12 per cent — or about £30.
A rival energy group, npower, has also chosen tomorrow to put up its prices by 14.5 per cent for gas and 13.6 per cent for electricity, adding £58 and £38 respectively to a typical bill.
The price increases are the latest round of rises after a surge in wholesale gas prices, brought about in part because Britain is no longer self-sufficient in gas after North Sea supplies dwindled.
European gas markets are indexed to the oil market, which means that oil price rises also drive up the price of gas.
This month, Centrica said it was “inevitable” that its 17 million British Gas customers would face further rises in energy bills. Allan Asher, chief executive of EnergyWatch, the consumer watchdog, said: “2006 will get off to a lousy start. This is when bills are at their highest.
“For those who already spend a sizeable proportion of their income on heating, this news will only increase worries about whether they can afford to keep their homes warm.” Businesses have also complained that rises in the price of energy have affected their profitability and that their European competitors can take advantage.
Gas bills have risen by 40 per cent over the past two years and, with further rises expected in 2006, the figure could reach 50 per cent over three years.
Britain is putting pressure on the European Commission to open up energy markets in Europe. British companies have argued that restricted markets in Europe result in higher prices in Britain, as French and German companies save their own supplies for their own customers.
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