EDF, one of the UK’s big six energy suppliers, is to raise prices by 12% from October blaming rising wholesale energy costs.
The French company is lifting its standard variable tariff by GBP139 to an average of GBP1,277 a year, the maximum allowed following the rise in the price cap announced by regulator Ofgem just under two weeks ago.
“As Ofgem has explained, it is global gas prices that have caused the unprecedented increase in wholesale energy costs and, as a sustainable, long-term business, we must reflect the costs we face,” said Philippe Commaret, head of EDF’s UK retail business.
Standard variable tariffs are regulated by Ofgem with a cap on electricity and gas bills that is reviewed twice a year to reflect wholesale gas and electricity prices.
“We know a price rise is never welcome, especially in tough times,” Commaret added.
European gas prices have rocketed this year due to Covid, low stocks, outages in Norway and Russia and strong demand elsewhere for liquefied natural gas (LNG).
Earlier this month, Ofgem boss Jonathan Brearley said record increases in energy prices across the board, not just in gas and electricity but in petrol and diesel had prompted the rise in the price cap.
“The price cap means suppliers only pass on legitimate costs of supplying energy and cannot charge more than the level of the price cap, although they can charge less.”
At the time, he urged energy users to shop around for the best deal, while those who don’t want to switch can ask their supplier for a better tariff.
The new rate will come into force from October 1 for customers on EDF’s default tariffs but will not affect those on fixed tariff plans.