LONDON (Reuters) - E.ON UK (EONGn.DE) will raise its standard variable energy prices by just over 10 percent from April, becoming the first of Britain’s “big six” energy firms to announce a rise in line with regulator Ofgem’s new price cap.
Last week, Ofgem said the cap on duel-fuel bills - both gas and electricity - would rise by 117 pounds a year, or 10.3 percent, to 1,254 pounds a year from April 1 for average energy use.
“In line with that, we’ll be making changes to our standard variable tariff prices from 1st April and expect to see similar movements across the energy industry,” an E.ON UK spokeswoman said via email.
Ofgem was told by parliament last year to set a limit after lawmakers said customers were being overcharged for electricity and gas. Prime Minister Theresa May had called the tariffs a “rip-off”.
The regulator last week said the cap would rise from April to reflect higher costs for energy suppliers such as wholesale prices, which it said were 17 percent higher than during the last cap period.
Several of Britain’s biggest suppliers, a group known as the big six, which control around 70 percent of the market, complained the cap was initially set too low and most are expected to up their prices to match the cap level.
Innogy’s (IGY.DE) npower said the cap was partly why it announced plans last month to shed 900 jobs.
Reporting by Susanna Twidale; Editing by David Goodman and Jane Merriman