Big six energy supplier Eon has announced it will raise the price of its standard variable dual fuel tariff by 8.8 per cent from 26 April. Standard variable rates for electricity and gas only tariffs will increase by 13.8 per cent and 3.8 per cent respectively.
Around 2.5 million existing customers will be hit by the price increase unless they move to a fixed price deal before 26 April. This accounts for 62 per cent of Eon’s customer base.
The price rise stems “largely” from an increase in supply costs, said a statement issued by the supplier today. In particular, Eon identified costs arising from “social and environmental schemes, which support renewable energy and help customers use less energy”. It said such schemes have led to a 36 per cent increase in the company’s cost base.
In tandem with the price rise announcement, Eon also announced a range of initiatives designed to “shield” vulnerable customers from any adverse impact.
Commenting on the changes Tony Cocker, chief executive of Eon UK said: “This is the first time since January 2014 that we have increased our standard variable prices. It is an announcement we never want to make but is due in large part to the fact that many of the costs we don’t directly control.”
He said that, although these costs had been partially “offset” by the company via its wholesale hedging strategy, a price rise was nevertheless necessary.
Cocker concluded: “We will continue to work to make sure our customers are on the best tariff for them. For example we will be sending more than three million letters to customers this month with personalised savings messages making it clear how easy it is to swap to another tariff that might offer cheaper prices. In addition we will also be working to contact a number of potentially vulnerable customers currently on our standard variable tariff with a personalised quote for an exclusive product, which will be E.ON’s cheapest tariff.”
Last week, independent supplier Ecotricty also announced a price increase. It’s standard variable tariff will increase by 6.3 per cent for dual fuel customers from 4 April.