Energy News

Scottish Power hikes gas prices 19%

Wednesday 8 June, 2011

By Martin Fagan - news@consumerchoices.co.uk

The company’s second price rise in nine months, as pensioners already struggle to pay heating bills.

Hard-pressed Brits struggling with ever-rising prices have been dealt another blow with the announcement that Scottish Power is to raise the cost of gas by 19% and the cost of electricity by 10%.

The price hike will hit 2.4 million customers and raise the average dual fuel bill by £187 to £1,398 a year. However, Scottish Power said about 700,000 households would be protected by capped or fixed priced deals.

This rise comes on top of an earlier round of price hikes by the “big six” that ended in March. Suppliers increased their prices by an average of 5.6% for gas and 6.4% for electricity, hitting 28 million customers and adding a collective £630 million on household energy bills.

Scottish Power - owned by the Spanish conglomerate Iberdrola - blamed rising wholesale energy costs, which have jumped 30% in the past 12 months. However, the company made £1.15 billion profit last year.

Scottish Power’s announcement was widely condemned by MPs, the energy watchdog and consumer groups, who have voiced concerns that the remaining five of the “big six” energy companies - British Gas, EDF, E.ON, npower, Southern Electric - will follow suit in the coming weeks.

“It’s ironic this announcement comes exactly when the regulator is deciding whether energy firms are serious about treating consumers properly and if energy prices are fair,” said Audrey Gallacher, head of energy at watchdog Consumer Focus.

“Ofgem says the ‘big six’ have been quicker to raise prices than to cut them and are bamboozling consumers with complex tariffs. Scottish Power itself is under investigation by the regulator for unfair pricing and mis-selling.”

Compounding the misery felt by Brits in the face of soaring energy bills, a study by the Institute of Fiscal Studies (IFS) revealed many of the country’s poorest pensioners already face a nightmare choice between “heating and eating”.

The poorest pensioner households cut their food spending during very cold spells of weather to cover the cost of heating, the study found.

The IFS report added the Winter Fuel payment, along with the cold weather payment top-up, did not fully protect all older households from the impact of very cold weather.