Npower under fire as it joins others in price rises

Average tariffs for gas will increase by 15.7 per cent and electricity by 7.2 per cent from October 1, Npower said yesterday – meaning that the average monthly direct debit dual-fuel customer will see bills increase by 12.2 per cent – or £134 more a year.

The fourth largest provider in the UK blamed rising wholesale prices on the global market and a commitment to invest in future energy supplies.

The price increase comes at a time when household budgets are being stretched by the high cost of living and muted wage growth.

Other figures released yesterday confirmed inflation in July increased to 4.4 per cent from 4.2 per cent the previous month.

Npower is the fifth of the “big six” providers to announce a price rise, following Scottish and Southern Energy, Scottish Power, British Gas and E.ON. EDF is yet to announce changes to its tariffs.

The price increase is likely to provoke further outrage as it follows a stellar set of half-year results from Npower – which more than doubled its profits in the six months to June 30.

RWE, the parent owner of Npower, said its UK operations made operating profits of 352 million euros – £309m – in the period, up from 154 million euros – £135.2m.

But Npower said its price rises were less than those of its competitors and the company also introduced a new deal that fixes the new rates until March 2013, protecting customers who sign up for the next two winters.

Adam Scorer, director of external affairs at independent lobby group Consumer Focus, said Npower’s customers will have been “dreading this announcement”.

He said: “It will not come as a surprise, but it will be a source of great frustration when profits are up.

“It is welcome that these increases are lower than the rest of the big six but they will still be hard to swallow for hard-pressed consumers.”

Scottish Power raised its prices on August 1 – meaning that a dual fuel customer paying by direct debit saw their bills increase by £173 to £1,206 a year.

British Gas is to raise its gas and electricity prices by an average of 18 per cent and 16 per cent respectively tomorrow, increasing the average dual fuel bill by £190 a year to £1,219.