Energy supplier E.ON has vowed not to raise standard gas and electricity prices after SSE announced a price hike despite generating huge profits last year.
SSE caused outrage last month when it stated that gas and electricity tariffs would increase by 9 per cent from October. The decision by SSE, which is Britain’s second largest energy supplier, is estimated to affect more than five million households in the UK.
The announcement upset consumers largely because SSE generated a profit of £1.3 billion in 2011. According to Ofgem, the industry watchdog, the profit margins of energy suppliers in Britain will increase by approximately 14 per cent this year.
John Robertson, of the Energy and Climate Change Committee (ECCC), accused SSE of taking advantage of its customers. The politician said: “The fact is SSE energy barons have irresponsibly hiked its prices yet again, while lining their pockets with inconceivably huge amounts in profits”.
Fuel poverty is a serious issue in Britain, but few energy suppliers have responded positively to criticism about tariffs. As winter approaches, millions of households in the UK will be forced to choose between buying sufficient food for the month and turning on the central heating.
According to uSwitch.com, more than 80 per cent of households had to ration their use of energy last winter as a direct result of the rising cost of gas and electricity. After SSE increased tariffs by 9 per cent, many more households can expect to struggle this winter.
As the government is called on to prevent energy suppliers from profiteering at the expense of taxpayers, E.ON has pledged to maintain its standard residential tariffs for 2012. The supplier also vowed to simplify the process of comparing tariffs.
E.ON UK’s Chief Executive, Tony Cocker, said: “In May I promised our millions of customers that we would not raise our standard energy prices and given all the concern and speculation in recent days, I wanted to let our customers know that our standard energy prices won’t rise one penny in 2012”.
E.ON customers whose fixed-term deals expire before the end of the year may be subject to increased prices, however, which suggests that a price hike may be waiting for all E.ON customers early next year.