Powergen has announced that it will raise its electricity and gas prices from 5 January as a result of pressures facing suppliers.
The price increase is largely due to the sharp increase in wholesale costs, which have risen by over 25% for electricity and 18% for gas in the last twelve months. Other difficulties include the rising cost of gas transportation, system balancing and costs incurred by the Renewables Obligation.
The increase will be an average of 6.9% for electricity and 4.9% for gas. Prices will remain the same for small business contract customers and customers on capped price products until their contracts expire.
In an attempt to help its more vulnerable customers, Powergen says it will not increase the prices for prepayment meter customers until April, with Age Concern and Staywarm customers paying the same prices until the situation is reviewed in spring.
The managing director of Powergen Retail, Nick Horler, says: ?Powergen is not alone in facing these increasing costs but it is the only leading energy supplier not to have raised its consumer electricity prices in seven years. Even as our competitors? electricity prices have gone up over the course of this year, we have held off. With this change, these prices are still 12% cheaper in real terms than they were in 1996 while, for gas, at least eight out of 10 households would be better off with us than British Gas.?