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EDF hikes gas prices by 15%, and customers are looking elsewhere

EDF Energy has announced it too will be raising its prices. EDF gas prices will be raised by 15% and EDF electricity prices by 4.5% on the 10th November 2011. This means that EDF is the last of the "big six" energy suppliers to announce large price increases for domestic energy supplies.

The annual cost of a standard dual-fuel bill paid by Direct Debit would rise to £1,165 from £1,051, said EDF. Still, many customers will baulk at these rises and many are struggling to manage their gas and electricity bills anyway, so this move will still likely lead to yet more households falling in to "fuel poverty".

OFGEM investigates high gas and electricity prices

The energy regulator, OFGEM, is investigating the need for these high gas and electricity prices. EDF, as well as the rest of the "big six" have all declared that they have been absorbing the cost of rising wholesale prices and investing in their infrastructure before being forced to pass the additional cost on to domestic customers.

However, OFGEM is not convinced this is strictly true, and is stepping up its investigation in to the financial affairs of the energy companies. It has contracted forensic accountants BDO to investigate whether the energy firms have been playing down their retail profits in order to justify higher prices. It may transpire that a Competition Commission inquiry is necessary in order to improve transparency and build trust within the energy industry.

High gas and electricity prices fuel UK inflation

The series of recent price rises from the big energy suppliers is a major factor in the high level of inflation in the UK. Households spent a significant proportion of their income on their gas and electricity bills. Inflation rose from 4.4% to 4.5% in the Consumer Prices Index, with the Retail Prices Index showing a rise from 5% to 5.2%. The government's target for inflation is 2%, and evidently these announcements to increases in the price of gas and electricity is not helping.

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Created: 19th Sep 2011, Last Modified: 7th Dec 2018, Switchomatic

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