E.ON announces price hikes

E.ON announces price hikes" class="imageframe alignright" height="200" src="http://pictures.directnews.co.uk/liveimages/gas+hob_1455_18459102_0_0_7001195_300.jpg" width="200"/>E.ON is raising energy bills by 15 per cent for gas and 9.7 per cent for electricity in February in response to soaring prices on the wholesale market.

Germany-based E.ON said the increase is the direct result of rising wholesale costs which have increased by over 60 per cent since February 2007.

The company is the fifth UK energy provider to announce higher bills for its customers in as many weeks.

Graham Bartlett, managing director of E.ON Energy, said: "We realise the impact this price increase will have on our customers and we're doing everything we can to minimise this.

"Our announcement has been made in response to sustained pressures from the wholesale market."

The increases will affect households on standard tariffs, affecting almost half of the company's eight million customer accounts.

According to price comparison site uSwitch.com, the average household bill for an E.ON dual fuel customer will now go up from £913 to £999.

But E.ON said that in order to shield 670,000 vulnerable customers from this increase until after the winter months, Age Concern and prepayment meter customers' prices will remain unchanged until April 1st 2008.

Consumer watchdog energywatch said that the size of the increases are "depressingly similar to those of the other suppliers".

Energywatch director of campaigns, Adam Scorer, said: "All the companies have quoted different percentage rises in wholesale gas costs, all the companies have different electricity generation they all have different hedging strategies, yet they come within £13 of each other on a £1,000 bill."

The government has recently announced an inquiry into the energy market to investigate accusations that the big energy companies are colluding on price.