SSE hikes gas and power prices

LONDON (Reuters) - Scottish and Southern Energy is to increase its gas prices for residential customers by an average of 29.2 percent and power prices by 19.2 percent from Monday, the company said on Thursday afternoon.

The announcement comes just four hours after rival E.ON UK announced similar increases, with both companies blaming soaring wholesale energy prices over the last year.

"Global demand for all types of energy has risen steeply and supplies of finite resources like oil and gas are under intense pressure," Alistair Phillips-Davies, Energy Supply Director of SSE said.

SSE said it would not increase prices again this year but warned that soaring global energy prices over the last year could force further increases beyond that.

"The world is experiencing an energy shock of a kind not seen since the early 1970s, but which is likely to have more profound and lasting consequences," Phillips-Davies said.

"The prices we all pay for electricity and gas are ultimately determined by the law of supply and demand in a global economy. This is what lies behind much of the dramatic increase in wholesale energy prices we have experienced."

The company said average wholesale power and gas prices had risen by 50 to 60 percent between February and July 2008.

SSE said the increases would not apply to poorer customers on its social tariff until the end of this winter, at the earliest.

(Reporting by Daniel Fineren )