Outfox the Market has announced a second price hike in a month and the fourth since June, prompting further concerns within the industry that the supplier may be struggling financially.
Customers on the company’s variable tariff will now pay an average of £1,128.80, a 14 per cent increase, from 1 January.
Prices have reportedly increased around 40 per cent from £807 in June.
Outfox has also ended its monthly membership fee, with customers now paying a daily standing charge of 28p per fuel instead.
In response to the latest rise, a spokesperson for BFY Consulting told Utility Week: “When the price cap arrives in January, we’re expecting some of the Eco/Warm Home Discount (WHD) obligated suppliers to struggle to achieve the hedging reference price – as well as a number of suppliers being unable to achieve the allowable cost to operate.
“We’re likely to see some pricing convergence around the cap – many suppliers are becoming less keen to offer deeply discounted acquisition tariffs, as the price cap will extend the payback period for the investment made when acquiring customers.
“We’re seeing price increases from a number of suppliers who are suffering from operational and financial control issues, which will impact their acquisition rates. Some of these price increases may not be needed – our billing and settlements analysis has found multi-million pound gross margin opportunities for a number of suppliers.”
Outfox is a non-obligated Eco and WHD supplier, but has set its variable tariff at just below the incoming energy price cap.
Ofgem set the final level of the incoming energy price cap at £1,137 on 6 November, just £1 higher than the proposed amount.
The spokeperson from BFY Consulting added: “A number of non-obligated suppliers are likely to price just below the cap (which includes the cost of the Eco/WHD obligations) in the hope of delivering profitable acquisition customers.
“We will be keeping a close eye on switching rates during this period.”
Other industry commentators drew reference to other suppliers which introduced sudden price increases before eventually failing.
Rik Smith, energy expert at Uswitch, tweeted: “Concerning news that ‘Outfox the Market’ is introducing a FOURTH price increase this year – totaling £323 – effective from 1 January.
“This is not unprecedented – GB Energy made a single price change of £236 in October 2016.”
Speaking to Utility Week, Smith said: “Conditions have been challenging in the retail energy market in 2018 – particularly for small suppliers who may not have the same financial backing as some of the more established providers.
“With seven smaller domestic energy companies having ceased trading this year, industry watchers are on the look out for any indicators that other brands may be in trouble, such as customer service issues or large, frequent price increases.”
GB Energy supply ceased trading just over a month after introducing that particular price rise.
Other companies that introduced sudden price rises include Iresa, which ceased trading in July this year.
Outfox announced this latest increase just weeks after raising winter prices, meaning customers will pay an average of 40 per cent more between October and March than they currently do and around 40 per cent less between April and September.
This means prices will more than double between summer and winter.
Outfox confirmed the latest price rise but declined to comment further.