E.ON to raise cost of standard variable tariff by average 4.8%
The energy giant blamed the increase on a significant rise in the cost of wholesale energy.
E.ON is increasing the cost of its standard variable tariff by an average of 4.8% or £55 for customers taking both fuels from August 16 due to the “significant rise in the cost of wholesale energy”, it has announced.
The unit price of its standard variable E.ON EnergyPlan will rise by 6.2% or £36 for electricity-only customers and 3.3% or £19 for gas-only customers.
E.ON last increased its standard unit prices in April last year, but said it had seen increases of 22% for wholesale energy costs since March this year.
A number of costs have risen quite sharply and in particular we’ve experienced a hike in the price we have to pay for the energy our customers need, partly driven by the Beast from the East and extreme weather conditions experienced earlier this year. Through advanced purchases we had been able to shield our customers from some, but not all, of this impact. Michael Lewis, E.ON UK chief executive
It attributed the increase “largely” to the impact of the extremely cold temperatures earlier this year depleting European gas storage, along with Middle Eastern politics “which have caused prices to increase dramatically”.
It said the cost of policies such as the Renewables Obligation, Electricity Market Reform (EMR) and Feed in Tariffs (FITs) had also increased during this time.
E.ON UK chief executive Michael Lewis said: “We had hoped that, by making the structural changes we made earlier this year, impacting bills by around £22 a year, we could avoid an increase in our unit price.
“However, as was seen in relation to the increases in the regulated prepayment cap in April, a number of costs have risen quite sharply and in particular we’ve experienced a hike in the price we have to pay for the energy our customers need, partly driven by the Beast from the East and extreme weather conditions experienced earlier this year. Through advanced purchases we had been able to shield our customers from some, but not all, of this impact.
“We’ll continue proactively to tell customers about the different tariffs on offer and encourage them to move to those tariffs, as well as promoting the different services that can potentially help bring their bills down such as a smart meter, a more efficient boiler or better insulation.”
E.ON said it had contacted around 1.8 million standard variable tariff customers to advice them that cheaper tariffs could be available, and had seen a 21% fall in the number of these accounts over the last 18 months.
E.ON is committed to both improving customer engagement in the energy market and keeping prices as affordable as possible.
It will be writing to affected customers in the coming weeks to notify them of the change and will continue to work hard to offer choice and to advise customers of savings they could make on the cheaper tariffs available.
E.ON’s announcement follows Npower, EDF and British Gas also raising their prices.
A Government-enforced price cap set to be introduced on standard variable tariffs (SVTs) later this year.