Big six supplier Scottish Power has announced it is increasing its standard variable tariff (SVT) for the second time this year as a result of rising wholesale energy costs.
Around 900,000 dual fuel customers will see an average rise of 3.7 per cent from 8 October, due to a 20 per cent increase in wholesale costs since April.
Scottish Power says the cost pressures are the same which led to industry regulator Ofgem announcing a 4.4 per cent increase to the prepayment safeguard tariff cap earlier this month, the second increase this year.
Neil Clitheroe, chief executive retail and generation at Scottish Power, said: “We have seen significant increases in wholesale energy costs since April, and like others in the industry, this means that we need to increase our prices.
“More than two-thirds of our customers are on fixed price products or other tariffs not impacted by this price change.
“Those customers affected by the price change will be contacted and offered the opportunity to move to a fixed price tariff alternative and avoid this increase.”
In response to the rise, Stephen Murray, energy expert at MoneySuperMarket, said:“This is the sixth month in a row when a big six supplier has announced a price rise, so we shouldn’t be surprised by today’s announcement.
“Traditionally these rises were always bunched together at the beginning or end of the year, but the changing nature of the wholesale market means the price of energy is going up all the time and suppliers now feel the need to reflect this in their bills.
“With the energy price cap just around the corner, it could well get worse before it gets better for consumers.
“Ofgem recently gave a clear indication of increasing costs when it lifted the safeguard tariff by £47, so it’s inevitable that even after the price cap is introduced standard tariffs will still be amongst the most expensive and definitely higher than when the cap was first proposed by the government in May last year.”
Meanwhile Gillian Guy, chief executive at Citizens Advice, said another price hike is the “last thing” Scottish Power customers need.
She added: “Vulnerable people in particular will be hit by this price rise. We know that those least likely to switch, and therefore on a standard variable tariff, include the elderly, those on low incomes and people with disabilities.”
Scottish Power last raised prices by 5.5 per cent for its SVT in June.
As with the latest rise the company said wholesale energy costs were to blame.