This week the UK's major gas and electricity suppliers have announced steep price hikes.
For energy customers, the new year's winter will be more bitter than last year's.
Energy prices are on the up, and for consumers that means higher bills. Last week Npower was the first to increase its prices, making gas and electricity bills with the provider 17.2 % and 12.7% more expensive respectively. This made the average household bill more than £1000 a year. The rest of us are not out of the woods though as over the next few months other energy providers including British Gas will also be increasing their prices.
High demand for oil and rising wholesale prices are to blame for the price rise customers now face. The Chancellor Alistair Darling is holding meetings with the head of energy regulator Ofgem to better understand the link between wholesale prices and customer bills. His aim is to avoid any knock on effects in the economy and to consider protective methods for the poor who will be worst hit.
There are concerns that energy providers are exploiting the rise in wholesale prices to their advantage. However, with wholesale prices going up, in New York the price of a barrel hit the $100 mark, strong demand and weak supply, consumer's bills will automatically face the brunt.
The amount you pay for energy depends on the amount of energy you use and where you live, so online comparison sites are advising customers to shop around and see if they can make short term savings by switching energy provider. For customers who are on fixed term tariffs, prices will not rise until the fixed term ends.
Unfortunately it may not end with higher energy bills, as oil is a core component of many other household products including packaging and plastics, and as a result we may see a rise in the price of a number of other goods on our supermarket visits over the next few months.
